Have another look at the sales. It sold about an extra 1.2-1.3M in 2007 than it did in 2006.

I'm working off a vague memory here, but did he confuse the sales numbers somewhat? He says the 360 sold over 10 million in its first year and reached 17 million by the end of 2007, proving that it's slowing down. But wasn't the first number actually "shipped" and the second "sold," so that actual numbers at the end of 2006 were around 8 million and it in fact did better in its second year? Similarly, the PS3's 9.5 million were sold, not shipped, so that it did better than the 360 in its respective first year, not worse.

Unless I'm mistaken, that changes things a bit.

I think the biggest problem with these kinds of articles is that most count shipping to stores rather than bought by consumers.

Microsoft Shipped 10.5 million XBOX 360s through 2006, then 17.7 million through 2007, so only 7.2 million 360s were sold last year versus 10.5 two years ago. My math is correct, the 360 is in decline.

The 360 did NOT sell less in 2007 than they did in 2006. MS stuffed the channel in holiday 2006 and shipped very few units in the first half of 2007 because of it.

This guy is using shipped numbers, not sold to customer. We've been over this a million times on this forum. 

06 X360 sales: 6,872,074

07 X360 sales: 8,162,707

Now it's been a few years since I last took a math class so I may be mistaken here but last i checked 8.1 is greater than 6.8. Did that change recently?  Maybe when they removed Pluto from the planets list.....

Using your logic, all MS has to do is stuff the supply channel again and things will be all rosey. They heaped Xboxes on retailers, screwing up the shipped numbers from year to year.

Let's stick to sold to consumer numbers. They are the ONLY numbers that matter. 

ehm... SORRY! Jesus, I had no idea that Microsoft stuffed the channel like that, I didn't know that they had close to four million units in the channel at the end of 2006.

That brings me to another point, that's even worse. 4 million units in the channel is nothing to brag about. But this does beg the question, where the hell are all of the XBOX 360s now? They had close to four million in the channel at the beginning of 2007, and now there's a sudden "shortage"...

MS realized their mistake with stuffing the channel like that in holiday 2006... It meant that no retailers would accept any new units for almost half a year as they sold off holiday stock. There's a good chance they simply overreacted and slowed down production too much in holiday 2007 to compensate.

There are several possible reasons for this shortage. No one seems to have an explanation that makes 100% sense right now.