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Killiana1a said:

1. Do the console manufacturers know how much has sold at each store or each video game retail company? Or are they conflating shipped units with sold units deliberately to inflate numbers and give hype where none is validated?

Probably not, as I doubt retailers hand over their sales data to all their suppliers.  They can make an educated guess on how well something is selling though, from orders coming in from retailers(from quantity of units and frequency).  Again...Sony sells to retailers, so THEIR SHIPPED FIGURE IS SOLD. 

Killiana1a said:

2. Could it be that stores are ordering Move units en masse with the expectation of holidays coming that they will sell every single Move unit?

I doubt retailers are stockpiling Move units in warehouses this far out from Xmas.  Things tend not to be in the warehouse all that long.  Plus it looks bad on the Profit/Loss as you've then got a multi-million dollar expense that you won't recoup for a couple of months.  Also, if you ordered and took delivery in October, had to pay in November(depending on payment terms obviously), but didn't plan on selling them until December, that's not very good business.

Killiana1a said:

3. Should we outside the industry trust industry numbers and public statements from those invested in the success on their face? If so, why? If not, then please tell us just how why they spread this misinformation expecting all of us to be born yesterday?

Are you saying that you should never accept any numbers, or information, given to you by anyone involved in that industry/company/government ever?

Sony have the most accurate figures you can have for number of Move units they've sold/that have been produced(like any other company with their own products).  No other entity has as accurate information.  You can either accept what they say, or assume everything everyone tells you is lies.  Though that's not to say that information doesn't get "spun".

Killiana1a said:

To further back up my skepticism, here is another quote from the same article:

The company said Thursday that it had shipped 1 million Move controllers in the U.S. and Canada, plus 1.5 million units in Europe, since launching the device Sept. 19. (Move has not yet launched in Asia.)

2.5 million units shipped (1 million Americas; 1.5 Europe) does not mean jack squat. The way I read it is that Gamestop, Best Buy and Wal-Mart are stocking up for the holidays with the expectation of selling everyone of them. I am not so emotionally invested, therefore disconnected from reality to actually believe shipped = sold.

Shipped does not equal sold. All it means is expected to sell with an equal chance it will not sell just as it will sell.

Yes it does, Sony shipped means Sony sold.  I doubt whether Gamestop, Wal-Mart et-al are stockpiling Move units now for Xmas.  If they were, why has Sony twice increased production?  To meet a demand that will already be fulfilled with the units that have been stockpiled?