While I will not pretend to be a mass psychologist, I would venture the following explanation:

First, they hit the magical price point of $199. This is the "cheap enough" price point. The "impulse buy" point. $199 seems twice as cheap as $210. Crazy but true.

Second, the holiday season is full with casual buyers that are looking for a good, low risk bargin. They heard of the xbox and they see it is very cheap (see point 1) so they just buy it. They don't run spec comparisons. They don't care about BR. They are just out for a good safe bargin. Microsoft gives them exactly that.

 win

Your site - yes. But I hope you are willing to stand up to scrutany. I am a numbers junkie and will call it out whenever things don't add up for me.

Also, let's not confuse Europe with "Others". When Microsoft talks about Europe, they mean only ~75% of the VGC "Others" market.

Let's look at the whole picture. Right now you are assuming 2M units in the channel already. (25M shipped per Microsoft public statements, 23M sold per VGC). This is a bit too much. 2M units stocked in the channel so early is a bad use of storage space and capital at the retailers level and also a bad risk.

Also, independent statements from the retailers suggested a shortage of 360 in the making (see the GameStop CEO statements), casting doubt on the assessment of such a huge inventory in the channel.

So all together I believe the actual channel stoking numbers are about 500K lower than your own channel inventory assessment. That said, overall, you are really pretty close 23M is probably just 2% undertracking under for LTD. Really commendable. 

If you go to the original source you will see that MS are saying the numbers are for Europe, Middle East and Africa (EMEA). It is the media that has a bad habit of just saying Europe.

Go off the financial reports. Those are required to be accurate by law. Press articles and PR statements don't have have the same threshold for accuracy.

Correct! EMEA is indeed Europe + Middle East + Africa.

As it happens, there are virtually no 360 sales in Africa and the middle east. Most of the other in VGC "Others" is made out of Australia, New Zealand, Korea and the rest of Asia - Pacific (excluding Japan) which are not EMEA. So the math does not change.

Yes, there are different standards, but both are required by law to be accurate (USA law - Sabrens-Oxley).

The main difference is that the board, CEO and the CFO are personally responsible for the financial reports accuracy. The company in general is still responsible for any business performance public statement and can be found liable if it is falsely made. 

So because a US company said that a single SKU of the 360 *might* see shortages, you take that to mean there is less inventory than normal in Europe?

Keep in mind these shipped numbers you're quoting are also including units in transit, so it's a couple weeks behind.

Units in transit are of course a regular part of the channel inventory. Nothing new about it and the ships are sailing at the same speed all year around. There were unit in transit before and there are units in transit now. So nothing is really changing here.

I am not proposing that "there is less inventory than normal in Europe". It is VGC that is claiming an unreasonable amout of inventory in the channel. 2M units in the channel at mid November is just an aweful lot. Way too much. 

OMG I've never seen anyone make a half decent arguement against FishyJoe when it comes to economics (not saying your arguement is half decent it's a good one)...I'm going to enjoy this. Interesting thread and keep it up, I'm learning a lot! Time to make some popcorn =)