I think since Microsoft has lost tons of money with the Xbox and tons of money with the 360 (and continues to lose money), Microsoft will give up on the console business. There are not enough hardcore gamers in the world to help Microsoft gain a profit. I think the install base of the 360 won't surpass the install base of the Xbox.

Microsoft should have never got into the console business. It's not a profitable venture for Microsoft.

Fanboys, say goodbye to the 360 because its going to end up like Dreamcast.

I am fairly certain the RRoD thing will blow over.  Once they get Falcon out, drop the price, and hit the holidays with Halo 3, their repair issues will be a distant memory for all but the fanboys.

The 360 has been headed for profitability.  Again, the cost of the RRoD repairs was a major bump in the road, but it doesn't change the fact that production costs are much lower for the Falcon, the userbase is still growing, and that the 360 has the best software attach rates of all current-gen consoles so far.  These things all spell profit for Microsoft's games division.

Let's not forget exclusive downloadable content in GTA IV... 

No and possibly.

This entire topic is flamebait, especially that last sentence.

Hey, but think of it that way:

If MS really entered the market to prevent sony from living room domination, then they might be happy enough with BigN taking over and cut their losses.

personally, I think MS might squeeze out a profit from the X360 during the holiday quarter. Since they've effectively eaten the cost of the warranty in one big go, it shouldn't effect their bottom line in the future (unless something else goes wrong). Strong sales of hardware over the holidays as well as GTAIV and Halo 3 should see the Xbox360 making a profit in the holiday quarter (Q2). The Xbox never made a profit but I believe the Xbox was never sold at a profit due to MS stuffing up the contract with Intel and Nvidia.

on the other hand, I would be very surprised if the PS3 manages to overtake the Xbox360 in terms of installed base. I don't quite understand how come so many people count on the PS3 overtaking the 360 when the 360 has the momentum and the developers behind it.

I still don't think the Xbox360 will be a profitable venture over all, but it won't lose money for its entire lifetime like the Xbox did.

Yes, the share holders wont tolerate a failure for ever. Ms blew their early lead with their awful hardware quality thats now costing them big time.

The answer is simple, two words: Europe and Japan...

The 360 is mostly an american console with american games for american tastes... it will never catch the japanese mass market, and it will stay a niche market in Europe... look at the 360 sales numbers: 2/3 are done in the US...

And even in the US, the number of hardcore gamers potentially interested is not infinite... the 360 will reach 20-25 millions worldwide, just like the first Xbox... and it will never be profitable, of course... so indeed, it may be Microsoft's last try, and i think they'll focus on games for PC in future years...

After all, it would make sense, as PC's are supposed to be "theirs"... Microsoft is a software company, not a hardware company, the Red Ring has proved it a billion times... you'll never see such a failure rate on Sony's consoles, and i don't even mention Nintendo's consoles... Japan's tech products have always been the best, and a lot of people know that by now...

The problem of Microsoft compared to Sony / Nintendo :

They lake of a worldwide brand name :

Nintendo : most older console maker, still alive, in the world.
Fan of Nintendo are old gamer that played to Mario/Zelda.
+
Wiimote in Wii : lot of hype + news product + lof of fun + cheap
Currently opening the market to news gamer.

Sony :
Opened the market, with the PS/PS2 release, to new gamer (younger that the Nintendo gamers) and casual gamer.

Microsoft :
No special identity, they come the last, and DONT SUCCEED TO OPEN THE MARKET. There fan base is restricted to hardcore player. No news gamer seduced by the Xbox games that were mainly to similar to PC games.
Most Xbox player also get a PS/PS2.

CONCLUSION :

Microsoft doesnt have a brand name as Nintendo/Mario or Sony/Playstation.
People know Microsoft for their expensive OS, not for their consoles.
If this true that NA Xbox make a good job and that Halo is famous.
Outisde of America, Xbox doesnt exist.
Halo3 = 4 M pre-order = +80% in USA

I see Microsoft trying again with Xbox 720 before they'd ditch the market. If that does any worse then I can't see how they'd try again.

Same for Sony. If PS3 crashes and burns, I still expect to see them choke out a PS4 before "giving up."

Microsoft think permenant huge losses are acceptable for some reason. It doesn't make business sense in my opinion.