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As of three months ago Microsoft still wasn't breaking even on the 360 hardware.

http://blog.seattlepi.nwsource.com/microsoft/archives/137377.asp?source=rss

"Does the operating profit mean that the company is no longer losing money on the Xbox 360 hardware?

Colleen Healy, Microsoft's general manager of investor relations, didn't answer that question directly when I asked this afternoon. However, she said, "What I can confirm for you is we're making really good progress on that cost curve.""

I don't know if they have been asked again after this latest quarter but that answer didn't sound like they were close to breaking even on the 360 hardware manufacturing costs.