Quotes are from Mr.Stickball's news story on the front page.
"1) At launch, the Xbox 360 costs approximately $525 in parts to make a unit - Roughly 24% over the price of a standard $399.99 USD Premium model.
2) By November 2006, that price, according to iSuppli had decreased by nearly 40% - From Approximately $525 per unit to $323.90 per unit for the Premium model, and under $280.00 for the HDD-Less Core model (which is now the Arcade).
3) Since then, Microsoft has made 2 major revisions to the Xbox 360, the 2nd heatsink, and the cost-cutting 65nm archatcture of the Falcon revision. According to DailyTech, the Falcon revision cut CPU manufacturing costs by 50%. "
The price of the console only needs to have dropped $80 in 2 YEARS for them not to be losing money. I think M$ will be alright.
