Retailers have told Eurogamer that Microsoft will increase the price of the Arcade Xbox 360 bundle to £159.99 (from £129.99) starting 1st September. The five XBLA games will no longer be included in the bundle, either.

ShopTo boss Igor Cipolletta received confirmation from Microsoft this morning, as did a corroborating independent retail chain source.

We're also told that Microsoft will bump the price of individual Xbox 360 accessories by one or two pounds. Our independent retail source said this is being done to counteract the poor pound-to-Euro currency exchange rate.

Furthermore, the email from Microsoft to retailers mentioned only Arcade and Elite bundles. This strengthens rumours that the Premium Xbox 360 bundle is being discontinued.