It was somewhat common knowledge from the start that the Xbox 360 was low grade hardware. If anything surprises me about this its that Americans (yes I am one too) aren't blind enough to keep buying them at the speed they had been despite these problems. I was under the impression that the mantra of the hardcore gamer this generation was "It's expected for a good system to not work when its launched and only last a couple years at best". Either this philosophy is losing favor or I guess the PS3 is finally starting to win favor with the fratboy and ganster-wannabe demographics that had given the Xbox 360 and Xbox a foot hold in the market.

Regardless, if any utilitarian qualities can be attributed to the 360, it would be that it acts as a counter agent of sorts against the PS3. With the two of them hacking away at each other’s disruption markets the Wii is free to grow and spread relatively unimpeded for a while longer.

 wow, life will be hard for you.

more $ = better defence = the one with more $ winning in the court, is that to cpmplex ? 

Celb, you can't "own the Courts" if the "Courts" aren't for sale.

Seeing as how the US government could literally throw trillions of dollars at a compelling case in order to win it, there is no way your argument makes even the remotest sense. No company in the world can spend like a government can. Bribes don't work in most cases either, because a judge powerful enough to hear a case involving billions already has tremendous power and doesn't need the money. Quit the Sony/Microsoft buy justice bullshit.

Although there is a strong correlation between money and winning cases, it doesnt always work. MS has lost many cases and so have other bohemoths including the RIAA, IBM, Sony... you name it they have lost a case somewhere. All the money in the world cannot buy you a defense if one doesnt exist and or your public image is in shambles which is what MS is facing right now. Millions of people saying their console is defective. This is hard to fight against.

Anyway no surprise on the plunge in sales. This will continue until they either have a price cut or make a better console. I dont think even Halo will save them if they dont do the above.

Be easy on Celb.

Common sense eludes some folk. We can't all make sense, ya know. Sheesh!

On topic, MS will continue to see sales decline until they drop the price and release a more reliable console. The thing's been on the market longer than the PS2 when it dropped its price.

A question Im starting to contemplate about MS stuffing the supply channel in December:

No one has really "figured out" why MS shipped about 2x the amount of consoles it needed, then proceeded to vastly undership (understandably) the next 2 quarters.

Could it be that MS knew 65nm process + other discounts were ahead, and that the current line of X360s were faulty, a new real model (falcon sku) was going to be coming, and wanted to drain the channel; to get rid of the faulty line, in one last production swoop?

Knowing that the 1b refund would be impending, the thing you'd want to do is get the new models ASAP. Unfortunately, you can't really switch production mid stream, so you need a huge retail backlog of available units, so they can sell. Maybe MS designed the whole overshipping, since this would allow them to re-tool the dies, and re-engieneer the X360 with the Falcon now, and 65nm Xenos in May (as stated by sources).

So if this were the case, and MS intentionally overstuffed the channel, so they could get the factories re-tooled quicker, knowing the 65nm + falcon would fix the 1b bear they've created.

Or MS, well more accurately the managers making decisions with their bonuses on the line, just wanted to make their 10 million bragging milestone.  Probably a more accurate guestimation, Occam's Razor and such.  Of course that could cause problems later, but I don't think the poor sales they've seen so far this year was part of their plan.

Overall it's not like this is unexpected.  Anyone follwing news about the 360 should be aware that stories like this were coming.  I doubt these issues will cause any real long term problems for MS.  It'll cost money but they have enough so long as the shareholders remain quiescent.  It may prevent them from breaking out of the hard core American male gamer rut they are in but it's not like the 360 has much hope of doing that anyways.  Hopefully they will learn a good lesson from all this and be a lot smarter next generation if they decide to stay in the console market. 

I would be to, if I thought any court had that power, but it doesn't work that way.

Furthermore, mandatory recalls are for DANGERS in product, and breakdowns are just annoyances.

It isn't even fraud, since they admit mistakes (even if not specific), and have earmarked a billion dollars for rapairs.