But it's a 360 arcade, only a 256MB card. The upcoming and mandatory xbox live update comes in at 128MB. Not only that, but the arcade doesn't come with a game pack-in (WiiSports for the Wii).
Finally, the casual gamer demand for the 360 is not nearly as signifcant as the Wii's.
I own both consoles, and they do different things. The Wii isn't MS's or Sony's competition. I'd say that the Wii holding its price through this holiday season is a solid bet. The company that really needs to drop price is Sony, because a Wii + 360 combination is a much more interesting combination and pricewise is comparable to a standalone PS3.