coolguy when you start building them has nothing to do with the amount you ship.
You just estimate sales and put that amount in the stores, it's cheaper to hold them in a deposit than in the store you know :\

What? Why would it be more expensive to HOLD them in a store versus a warehouse? I could see shipping costs be an expense, but it is my understanding that the stores purchase the consoles and sell them to consumers? Maybe I'm wrong?

dsgrue3 AFAIK they don't sell consoles to stores, that's how they can drop the price how they want, they control the price not the stores. for this they must half-rent a section in stores, and shipping is an issue as well.

Yes I know they set the retail price. However I was under the impression they sold to the stores for cheaper so both parties benefit from the sale between the consumer and the store. Say the store gets the product for $50 cheaper, then that's the store's profit. This isn't how it works?

Yes, retailers have a mark-up. I'd argue it's more than 10% too since thats usually the employee discount. Stores need to make profit even on their employees.

they might have sold out bundles but not regular SKUs.

They didnt sell out of the 250gig but they might have well sold out of the 120 one.

Yes I think so, This is what Sony was waiting for, with the price drop and slim model comming out. They will be ready for this holiday season, Black Friday went well, Sony seeing those numbers will continue to produce more product to sale.

In europe at least the supplier (i.e. Sony/MS/Nintendo) can only set a RRP (recommended retail price).  They then sell the product to the retailers at 'trade price', which is lower than that.  Different retailers can negotiate different pricing depending on size/importance/etc.  Retailers set the price to the consumer to whatever they want.  I believe it is illegal for a supplier to attempt to control retail pricing (at least in EU).

stiak I am in europe and when sony announces a price cut all stores "obey"
either they are paying them or they just use the store as a second party for selling their products and give them a certain % (fixed per console)
So the store gets the price from sony since sony sells them, the store acts as the middle man and gets some cash for sold console, that's how sony can decide price cuts and stuff.
OR maybe that is in some special sony parterns stores.
Another example, when a game goes platinum, even non platinum copies get the price cuts, even before platinum boxes even come to store.
I think this may be only to official sony supported stores though, cause some retails keep prices high since they probably bough them, don't act as middleman.
I may be wrong though on some points.