We knew that it would not likely take long for Microsoft to clear out their inventory of the older Xbox units in favor of the new slim designed consoles. Sources have confirmed that a new low-end Xbox 360 slim arcade bundle offering is right around the corner.

From what we hear, the new slim Xbox 360 Arcade bundle will (of course) not offer a hard drive, but will offer 4GB of storage. Our sources have not been able to confirm to us just how Microsoft will offer this storage, but it will either be on the board, replacing the 512MB that is in current slim Xbox 360 units, or in addition to the 512MB on the board with a branded USB flash drive device.

No matter which way Microsoft adds the additional 4GB of storage to Arcade models, it is a significant upgrade over the 256MB and 512MB that has been offered in previous Arcade offerings. While no one wants to talk about a date yet, we hear that it will be soon; and the suggested retail price could also drop from $199 to $189, according to sources claiming to be familiar with the situation.

We suspect that the new slim Arcade bundle could start showing up as soon as the next couple of weeks, but we think that it might be destined for a release in August at some point, thus giving retailers a chance to move remaining old-style consoles by once again slashing the price by $20.