Microsoft, on the other hand, are flooding [read: diluting] the market with more and more SKUs, to the point where existing 360 owners (and possibly developers) don't know where they stand, and consumers can't keep up.
Sooo, would you like the Core, the Premium, the Elite, the Halo 3 Elite, the Pro, the Arcade, the upgraded Premium, or the Blu-Ray-enabled model?
Did I get them all, or have I missed some? That last one was pure speculation, but there's been some very loud whispers across the interwebs that Microsoft is seriously considering a Blu-Ray-enabled 360. If they do go down this route, they'd have to keep the games on DVD, or risk losing software sales from 20+ million 360 users. See the problem with Microsoft's 'chop and change' philosophy? It doesn't work well in the long term. They would do well to adopt Sony's 'stubbornly stick to your guns, even in the face of certain death' philosophy. Sony took a huge risk with Blu-Ray, and while you could legitimately argue that it was their risk to take, at least PS3 owners are on the same page now.
And let's not forget the good ol' Wii. It hasn't changed since release - everyone knows where they stand with Wii - and it's still selling like hotcakes [hell, it's selling better than hotcakes; I haven't bought hotcakes since I got my Wii!].
Perhaps Microsoft should be looking at upgrading [read: eliminating] the Red Ring of Death(TM) first.
Does Microsoft remind you of a cartoon with too many characters? Are consumers literally spoiled for choice? Would they sell more 360s with one SKU? Thoughts! Now!