The remaining Arcade models, which aren't in production anymore, are $150. The new low end model is back up to $200.
Also, anyone considering buying a 360 without a hard drive at this point (or at least the ones who don't already own a 360) would be better served by a $200 Wii than a $150 360. For a gamer, a hard drive is necessary, and someone who isn't a traditional gamer would be better off with a Wii than a 360. Even if it were $50 more, you're getting two great games with it. I'm not sure if the 360 currently has games bundled with it, but if it does they surely aren't anywhere near the quality of Wii Sports and Resort. A lot of the Wii audience wouldn't even look at the 360 anyway; for them the choice is between getting a Wii and not getting a Wii, with no third option.