[HDThoreaun]

Microsoft also knows that if they sell xbox's for less overseas people will start buying those cheap ones and importing them to the US for resale.

[tombert]

That makes sense, and not really theoretical; it's pretty easy to buy Blu-rays and DVDs from foreign markets, and they're often considerably cheaper than their American versions.

They of course are region encoded, but I suspect nearly anyone who frequents Hacker News knows how to get around that.