Unlike with the original Xbox, Microsoft decided to not ship every Xbox 360 with a hard drive. While this saddened developers, Microsoft’s decision allowed it to offer a low-cost entry into the system.

With the upcoming release of the New Xbox Experience interface for Xbox 360, slated for November, the choice to offer a barebones core system without mass storage has painted those without hard drives into a corner.

The New Xbox Experience update will give the Xbox 360 a completely redone interface that will introduce new media streaming options, avatars, game installs and other features. Such an update will require at least 128 MB of storage, leaving those without hard drives or still-roomy 256 MB or 512 MB memory units out in the cold.

Microsoft’s solution to this arrives with its Xbox 360 Memory Upgrade Program, which gives owners of the neutered consoles a discounted – or even free – storage upgrade.

Gamers may hit Microsoft’s dedicated site here to see if they are eligible for one of the following offers after submission of console ID and serial number:

1. 512 MB Memory Unit for free
2. Refurbished 20 GB Hard Drive for $19.99
3. Refurbished 20 GB Hard Drive and three months of Xbox Live Gold for $29.99

To break it down, Xbox 360 Core units, which shipped with a wired controller and no storage at all, have the choice between the first two options. The Xbox 360 Arcade units, however, are directed to the third option as the SKU already includes a 256 MB Memory Unit.

Clearly, the offer does not extend to the Premium, Pro or Elite SKUs as those packages include hard drives in 20, 60 and 120 GB models.

Taking this upgrade path into consideration, the $199.99 price point for an Xbox 360 appears to be a strong value for the mainstream gamer. Even with the memory upgrade of $30, the total price is still comfortably below that of the Nintendo Wii.

Although nothing with topple the Nintendo juggernaut this holiday season, budget conscious gamers may give Microsoft’s console addition consideration thanks to its price, expanded multimedia media capabilities and perhaps even the friendly avatars.