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Sky Render said:
Understand that full market saturation is essentially unattainable. That would be when everybody has a system, and I do mean everybody. Most systems fall far short of that, as the amount of market force necessary to overcome market friction at that point is too great. Even with the mass (price) reduced to a minimal level, the friction of the market is just too heavy for any meaningful progress.

Your post, and HappySqurriel's post, make perfect sense to me.  I guess the only point I'm considering is that it seems the 360 is reaching a wider market and hasn't had the mass reductions than the original Xbox had, and therefore when its mass is reduced it may significantly outsell the original Xbox.