The Arcade is less expensive, and only comes with very bare amount of equipment. Normal Video cords, wired controller, small Hard drive, different layout. The 'normal' 360 comes with Wireless controller, large Hard Drive, HD Video cords, and free trial of xboxlive. Sometimes comes with a game. Correct me if I'm wrong, might be missing something. The arcade version is pretty much low-budget for new console gamers.