In addition to Kinect retail pricing, Microsoft announced a brand-new Xbox console: a 4GB Xbox 360 "slim" meant to replace the Xbox 360 Arcade SKU. "It will go on sale August 3rd in North America," Microsoft's Aaron Greenberg told Joystiq, "and later in the month of August around the world." This $200 console will sport the same new look as the Xbox 360 slim, "except it will have a matte finish," Greenberg said. Though there are currently no Xbox 360 hard drives on the market that support the new "slim" form factor, Greenberg told us that this 4GB unit "absolutely does have that expansion bay that we have the opportunity to use in the future." Between 16GB USB thumb drives and 4GB of internal storage, the entry-level Xbox is more attractive than ever.

Microsoft also detailed a Kinect bundle, featuring the aforementioned 4GB Xbox 360 along with the Kinect sensor and Kinect Adventures for $300. "We think this is really a tremendous value," Greenberg said. "We believe the launch of this product is going to be driving a whole new series of new consumers into the Xbox 360 family."