Who cares? M$ could afford to bring it down easily. GC has always been cheaper than XBox and up until last year it was a dead-heat. More units sold is more units sold is more units sold. They're both competing in the same market and their power is comparable. By that logic the generic brand cereal in the 20lb sacks should outsell the PC Game box sized name brand cereals... no? Its just as good, correct?
Yeah, it was always cheaper, but then last year GC also slashed it's price to HALF of Xbox's, one was worth $199 and the other $99, that's a HUGE price difference when talking about consoles.
And your example is flawed, because a genereci brand cereal probably tastes like crap, and noone has heard of it, while everyone has heard of apple jacks.
In this case, people know equally both systems, and perhaps Nintendo is more famous, so clueless parents, just buy a nintendo for their kids since that's what they have associated with videogames the last 20 years.
And you can't also say that X-box is MUCH better than GC or viceversa, both systems are equally lame, for a select few games.