There are different chip sizes in some cases for CPU and GPU. Falcon was CPU I think, so you have to be wary of which one you are discussing.

I was describing the CPU and MS has not mentioned anything about 45 nm for gpu at all and I doubt we will see them skip 65nm on the GPU that is a much harder task then the cpu. You stated MS was skipping the 65nm cpu to go for the 45nm cpu that is why I asked that ?.

Why oh why do people seek to read ulterior motives into everything? Why can't people simply accept that the most likely explanation for the supply shortages is Microsoft manufacturing/supply chain problems?

Yes Button-presser, but this is a speculation thread.

I'll agree with everyone in here that has said that it would be silly for MS to purposely understocked the 360 to increase the demand.  And the supply shortages are real in the U.S.  Of course the question is 'Why?'.

MS said that they underestimated demand.  Possible.  They probably didn't want to have a repeat of last year where they stuffed the channel with excess inventory.  That could have also been exacerbated by retailers who bore the brunt of that action and ordered fewer units for the 2007 holiday season.  Retailers order fewer units.  Manufacturer makes fewer to match retailer demand.  Consumers buy more than expected.  Shortages occur.

MS had made modifications to the console many times in the past and there hasn't been a supply issue in over a year.  The company hasn't been afraid to create additional skus (but I wish they would pare them down) and have 'old' hardware sitting right new to units.  Unless there is a major update coming, I doubt that such an action has caused this shortage. 

In fact, the current supply issue could throw off any planned price cuts since demand typically spikes after such an action and there are only the crappy Arcade units to be had.

For the person asking about zip codes, this site is worth checking out. http://www.zipcodemaps.com/

Either they are getting out of the console business or they have a new version coming out. All SKUs are low, which points to M$ limiting supply. Maybe there was a complete re-design due to the RROD and they want to get all of the old ones sold before launching there new one. I would imagine the new one was going to be shown at CES, but the Warner announcement killed it. Maybe they will put in a faster BD drive than what the PS3 has.

http://www.electronista.com/articles/08/02/15/xbox.360.valhalla.rumor/

That article suggests that the Xbox 360 will have two 65nm processors running this year, and that by the end of next year or early 2010 it will be a dual 65nm chip incorporating the CPu AND GPU. I must admit I hadn't heard of such a thing (the dual-chip), but surely its an excellent way to drop costs.

After all, whats cheaper than two cheap chips? One cheap chip.

Ok ssj12 just posted the valhalla news in the news section. I think it is quite likely that this new chipset could be the basis for a 360 slim. But at the same time i think it will probably come a little closer to Christmas.

I think whats more likely atm is either an underestimated demand-based shortage or a new bundle.

I think you are 100% correct.  Microsoft sort of did this last time, didn't they -- i.e. slowed manufacturing/shipping of old MB to get them out of the channel before a price drop.

I think this is a multi-pronged attack:

New motherboard design -- not a falcon "fix" but an entirely new board with shrunk GPU/CPU
Price Drop to $299 for the  "Elite" and no more premium.  Why?  These are the two that are hardest to find -- especially the elite. 

The reason they are doing this is so they don't have to reimburse retailers for a price drop and possibly cause this quarter to be a "loser".

Microsoft is pushing hard for video on demand and the 20 gigger isn't going to cut it.  They need AT LEAST a 60 gig just to have some decent room for movies and such.  Ideally the 120 gig or similar will stay with us as a $299 console...

I honestly can't see any other reason there would be a "shortage" as MS most certainly has large subcons that can crank up production in a heartbeat.  It's a cover for the coming price drop and model shuffle.  Period....

I also expect that they will still offer the arcade but they will quietly untie developers and allow them to build software that requires the hard drive if they can illustrate it as necessary.