MS loses money on every Arcade sold without accessories. Therein lies the rub.

Not many Arcades are sold sans HDD, extra controller, WiFi... or something.

The Pro/"Neo Elite" is basically just an arcade bundled with a HDD (heck it doesn't even come with component cables anymore, let alone HDMI) -- so they are profitable.

As someone previously in the thread stated, the X360 makes money as a brand -- you have to say "Arcade with no accessories and few games" if you want to claim they lose money on a sold console.

Sony is the same -- they lose money on PS3s, but make up the loss with pretty much the first accessory (or game) sold. Profitable from the brand standpoint.

I believe Nintendo is the only console manufacturer to make money on the base console unit (if you exclude the PS2 from consideration), although perhaps that's no longer true (I bet it is though), since the $50 price cut.

weekly and monthly the ps3 is too ;).

These days a 60GB hard drive and a 120GB hard drive are basically the same price. With the removal of the component cable, it's possible that the new Elite is slightly cheaper than the old Pro was. The Elite was always an overpriced luxury SKU, sold at a substantial profit margin; saying the price cut will cause Microsoft to "lose big amounts of money" is absurd.

If Microsoft is losing money on their hardware, it's primarily from the Arcade.

well, microsoft extorting money off of consumers with the 60 $ "expansion pack" should even things out. oh, and xbox live.
but even so, they were making a bit of a profit before the price cut. Now they are probably taking a small loss or are breaking even.

No, the burden of proof is on whoever makes the assertion that they are losing money.   Multiple reports in the past have stated that MS makes a profit on each box, this blog seems to be the only one who believes differently.

The console was profitable, naturally if you drop the price with a 100 dollars then it's likely it isn't profitable anymore unless they were making had an insane margin on the total costs. Eventually they will learn how to stop losing money on the console. But the brand in general makes it ok to lose money on it, same with Sony. All the extras and games will make it profitable. But we shouldn't forget that both HD consoles are doing very poorly, even Sony can keep up their PS3 assault thanks to do PS2. And Microsoft can keep up the 360 because of their other departments. so if they hadn't had those then both would have joined the ranks of the Dreamcast. Therefore a new console anytime soon is unimaginable unless it's a upgrade similiar to that of the gamecube to Wii. And guess what, both HD consoles are doing exacly that with Natal and the Wand.

What can one say about this thread...oooh...that's right...fail!

MS was making a huge profit on each Elite sold at $399. Problem is they didnt sell many Elites compared to Pro's and Arcades. Since a 60GB HDD now likely costs more for MS manufacturing to purchase then the 120GB HDD MS reduced the cost of the Elite and dropped the Pro.

Looking at the division the 360 in MS has put a number of businesses that are losing money in that division and the 360 is what is keeping that division near profitability. Not the other way around. Zune is still huge investment and in the red. Then you have the big money pit and that is Microsoft Mobile. The iPhone has taken over and MS is investing huge amounts on Microsoft Mobile business as the sales shrink.

Oh I`m loving it. Oh yes. Me loves it. Oh oh oh yes.

what are you getting off with?