I suspect RROD / QA related issues going on here.

There are several things to consider. Imagine that MS decided to fix its manufacturing process to get rid of the errors and only had hundreds of thousands of units stockpiled + in supply chain. The supply chain for a console selling 150k/wk world wide wouldn't be nearly as stuffed as Nintendo's, for example, but there'd still be maybe two weeks worth of consoles in that chain.

MS recently improved the speed of its warranty-replacement service to about 1 week from about 1 month. They may have injected some new consoles in the chain to do this. They've done it before.

If MS took its production facilities down, which is the only way they could possibly have a shortage for over a month when selling at one of their slowest times of the year, then they're probably working more diligently then they have so far to fix the 3RROD issue. Logistically, it makes sense for them to do this now. They may have determined that letting the issue slide for this long was a mistake and they wanted to fix it as soon as the holiday season was over.

Wii like levels huh? No you sounding more like a Sony fanboy with these dream scenarios. The 360 isn't in that much demand. It never will be, in NA or anywhere else. Also, if MSFT drops price, so will the PS3. We all know its coming, and Sony is not going to give anymore price room to the 360. It had a horrible year when that happened.

 Also, the new 360 versions, according to some random site I read, will have 2 65nm chips. The PS3 new PS3 model will have a 65nm and 45nm chip. Blu-ray will get progressively cheaper to produce, and soon the difference between the two consoles, even at reduced pricing, will be $50 or something worthless like that.

Dream on about the 360's master fake shortage plan, but when your losing worldwide in the biggest year of your direct competitors life cycle, faking a shortage isn't exactly smart. While I do see them introducing a new SKU, the price drop that follows will happen within a week on the PS3. And with these reduced price, more reliable SKU's coming, what happens with the existing Arcades and Halo editions? The 60gb had a reason to sell. Why buy a ugly Halo edition or a gimped 360 if you can get a new reliable premium for $200 or so?

One possibility is that they are stocking up for a major GTAIV market push? Price drop, bundled with GTAIV? This would be the only possible way I see Microsoft standing a chance at all this year. As you saw with HD DVD, if you don't have the software line-up to support your price drops, hardware boosts are extremely temporary.

That's just silly.  The lack of supply isn't going to create any huge demand.  At best, their sales when the unit comes back into supply will be sufficient to bring the 360 back to normal installed levels for the year.  At worst, the 360 will be pushed more quickly toward third place as the PS3 gains sales and momentum while the 360 is gone.

There will be those who want the 360 and can't get it.  They'll wait for it to come back into stock and then they'll buy it.  This will create a spike.  There will also be those who want a 360 and can't get it so they buy a PS3 instead.  They're happy with it and never get a 360.  There will be almost no one who says, "oh man, the 360 is hard to get.  I better get one when they're back in stock!"  That's just silly -- game systems don't sell because they're in short supply.  They're usually in short supply because they sell.

In the game console business, shortages are to the disadvantage of the company who has them.  If Nintendo could produce enough Wiis tomorrow for demand, they would.  It would be stupid not to.

Sony is getting a surprising amount of momentum right now. 

I say it again. Sony will drop the price first :)

I guess Jandre002 beat me to pointing out that madskillz is living in a dream world if he thinks the 360 is a hugely in demand console. And it seems likely that it's bound for last place even faster than anticipated.

I hope my bet is safe ;)

Has there been any word on a 65nm RSX? I haven't heard anything.

I was referring to the 40gb PS3. I have a 20gb PS3 that I enjoy. While I wouldn't have mind picking up a 60gb, I am more than happy with the 20gb one.

An MS rep said that online multiplayer was exclusive to the 360. I'll find the article.

Mad is right the MS guy did say that but a representative from Rockstar corrected him.

http://www.1up.com/do/newsStory?cId=3166233

Ok there is a lot of Sony fanboy drama happening in this thread. Geez, you go out to get a nice dinner, come home and the kids have gone crazy.

@Jandre. Sony are better than Microsoft at cutting costs, but not that much better. Recognizing their failings here, MS made sure to own each major component of the Xbox 360 but enlisted competent third party manufacturers to get costs down as quickly as possible. As Rocketpig said, there has been no mention of a 65nm RSX, whereas there has been discussion about 65nm Xbox 360 GPU's, not to mention the possibility of MS skipping 65 and going straight to a 45nm CPU (I don't think they will/can, but its been discussed).

@At all the people claiming the Xbox 360 is not a high demand console.
WE ARE TALKING ABOUT THE USA!!!! In that country the Xbox 360 IS a high demand console and long before MS said ANYTHING we were aware of shortages!!!! Though i'm not sure it was artificially created to raise demand, it is quite possible it was artificially created to prepare for a new bundle/SKU.

@Just Ben.
You may be right about Sony dropping first, but you must agree MS will drop before GTAIV??? As such, I think Sony dropping first is dangerous. You drop, spend a tonne advertising it and everyone rushes out to get your console for a couple of weeks. Then MS drops a week or two before GTAIV and the momentum swings back again.

@Slimebeast.
I reckon we will see a lot of footage of Banjo, Too Human and Fable at GDC, and perhaps a Gears of War 2 announcement. Disappointingly, I think we will see signs that Alan Wake is delayed to 2009. Though i'm sure new games will be announced, I am unsure as to what they will be. I think it's possible MS may have paid for one or two more big timed-exclusives which we could hear about at GDC.

I thought the Falcon chip was the 65nm? IF so how did they skip it