In what is becoming a trend for Microsoft this year, they are once again going on the offensive against the Wii with a price drop on the Xbox 360. While this new move isn't strictly a price drop, that's certainly what it ends up being for the customer, with the introduction of a temporary item promo with Arcade users getting the option of receiving a 512MB memory card for free or a 20GB HDD for $20.
Unlike most promos, this one applies to existing customers as well - if someone purchased a Core or Arcade unit, they apparently qualify. For those that go in and buy an Arcade version, they now have the option of upgrading to a more respectable console with the inclusion of the HDD. The stock 256MB of space on the Arcade was one of the drawbacks to its $200 price tag, and this new promo clearly adds significant value to the cheap console.
The 360 price cut turned out to be a huge boon to Microsoft in terms of sales. This new offering just makes it an even better buy and comes in preparation of the New Xbox Experience, which will roll out November 19 and require 128MB of free storage space.