Microsoft has yet to confirm the existence of a new basic Xbox 360 model, the Arcade edition, despite pictures of the model’s packaging appearing online.

The picture, hosted by the ShackNews site, is believed to have been taken inside a US gaming store, where it was priced at $280 (£140/€165) and sat in between a top of the range Elite and a Halo 3 Special Edition console. The picture adds weight to recent speculation that Microsoft is looking to ditch the diskless Xbox 360 Core as its most basic model.

Other online correspondents, at Engadget, claim to have handled an unboxed Arcade model and said it comes bundled with a game compilation disc and a 256MB memory card. The new model, like the existing Core, lacks a hard drive.

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It's also claimed the Arcade has an HDMI port, so it's clearly based on the new 'Falcon' motherboard design.

Screen-grabs from Amazon's US website of an SKU referring to an Xbox 360 Arcade model were recently shown online too, although the retailer has since removed the page.

Microsoft is keeping its mouth shut on the Arcade’s authenticity for the time being, meaning there’s no official word on a release date or price just yet.