so how credible is this news?

Pretty much confirmed.

You don't doubt Crazy Buttocks on a Train.

ok i went through the thread and it seems pretty much like this is a real issue. the question is what will happen? how will they fix this?

By either delaying the console, releasing another RedringofDeath, or as mentioned gimping the APU.

Agreed. I've seen a few articles published in "The Australian" newspaper and some others too.

Actually thats not correct.  If they are having yeild problems then its how many chips that come out fine.  So basically MS could ship with very low volumn or cannot do an international release like they did for the 360.

If they are forced to ship a low volume of consoles at launch their marketing team might probably spin it into something else along the lines of " Be the first to get the limited Xbone" or something like that.

I just took a peek at the Neogaf thread. They are saying that due to the many failings of the hardware, MS has been on a total rampage trying to pay 3rd Parties NOT to show their games on PS4....even tho they are. To try and turn the perception that XBO has more games than PS4.

If so, I feel like MS has reached a new low. Too bad many of the games shown will be exclusives :P

In the event this is actually true... For god sake, just delay it Microsoft. Launch sales/first year sales are peanuts in the long run, rushing through a gimped console in an already underpowered sounding gen because you couldn't go without 3 - 9 extra months of beginning mediocre sales is absolute suicide and will make the last 3 or so years of the console absolute hell.

I mean really, 1.2tflops (and 1.8tflops in PS4's case) is already just way too underpowered if you ask me, 2.2tflop should've been the minimum. A drop to below 1tflop... Oh my god, that'd be humiliating.

Umm, why do you think Sony will want more 3rd party games in their conference? It's business, not the care bears.