Microsoft is rumoured to be increasing rather than decreasing its pricing in the run up to Christmas as it re-aligns its Xbox 360 offering.

Gaming site Eurogamer, is reporting 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."

The move will come as a surprise to gamers who aren't used to things getting more expensive.

Furthermore, the email from Microsoft to retailers mentioned only Arcade and Elite bundles say Eurogamer suggesting earlier rumours that the Premium Xbox 360 bundle is to be discontinued.

A quick scan around UK online retailers shows Premium Xbox stock to be thin on the ground. and Amazon have both sold out with third party traders filling in the gaps. It is available on Argos however for £166.49.