Following my outing of the 16GB iPhone I have once again have attained from a rock solid source that Microsoft WILL be replacing the 20GB hard drive on the standard Xbox 360 with a larger 60GB version. Dates are not nailed down, but my source says Microsoft wants it done and dusted before the end of its financial year which translates as our Q2.
Interestingly the company is also toying with the idea of introducing a new 360 SKU and given that hard drive and connectivity variations are already covered it would seem that the most logical conclusion is a model with a built-in Blu-ray drive. An external drive makes sense too, but with the format war over it wouldn't explain Microsoft's hesitation and while it goes against the company line that the 360 is primarily a games console (verses the PS3's media centre ambitions) the collapse of HD DVD may well mean it at least wishes to give users the option. Tying this all up neatly is news that Microsoft is known to currently be in discussions with Sony.
At this stage how all these moves will affect the Arcade is unknown. A price cut is widely rumoured to be coming this month but - at least for now - it is unlikely to also be the beneficiary of a hand-me-down 20GB hard drive.
Back to certainties however, so let me tell you this: if you've been saving up for a 20GB Xbox 360 hold off. The 60GB model IS coming and you can take this exclusive to the bank.