While catching up on some podcasts, I was reminded of the Xbox 360 Tracker, to which I promptly subscribed.

After watching the results over the last week, I found it interesting that while stock did show up quite regularly, the items for sale were never the standard Core or Live systems.

Instead, bundles were being sold, which included a plethora of accessories and games, and the prices rarely dropping below $900-1000.

One would expect the retailer to gouge consumers a little, given the scare inventory, but I think there is more here than meets the eye.

Depending on which press release you believe, either Microsoft purposely scaled back production to sustain interest and sales, or demand exceeded their goals.

We know from launch numbers, demand was luke warm in Asia, and dwarfed even by the ill-fated Sega Dreamcast launch in the states.

So why blow your lead and opportunity in this manner?

After observing this the launch over the last few months, I think this boils down to something simpler.

Financial survival.

Having lost millions on the first Xbox, and the reported cost of producing a 360 somewhere between $550 and $725 per unit, even Microsoft can’t afford to sell millions of standalone units.

By tightening supply, they’re encouraging retailers to help them offset the loss up front.

Knowing that the gamers will shy away from forced bundling experienced during previous console launches, they are simply counting on the instincts of the retailers to help them

Subliminal bundling.

In this way, Microsoft is softening the financial impact during the first few quarterly reports. Instead of having to trot out the tired “razor blade” excuse to justify the massive losses incurred during the launch.