60 million is way too high, and even 35 million is a bit optimistic.
The 360 does fairly well in N. American, but in the rest of the world, it does very poorly, actually worse than the PS3. The 360 is selling at about the same rate as the Xbox, and of the seven active consoles, the only one it's ever managed to outsell is the PS3. It hasn't even outsold the PSP worldwide.
Its library lacks diversity. It has a lot of titles for older American males(shooters, racers, sports), but it doesn't have much for anyone else. This is why I think a price drop wouldn't really help the 360 as much as everyone thinks. It simply doesn't have mass appeal.
Halo will move a lot of hardware this Christmas, but what about '08? They haven't really announced anything big for next year while the PS3 and Wii have several big name titles coming.
Anyway, as far as how long Microsoft will keep making consoles, my guess is that it depends on profitability and marketshare. If the 360 fails to make a profit and/or the PS3 outsells it, I don't think they'll be back a third time.
Consoles owned: Saturn, Dreamcast, PS1, PS2, PSP, DS, PS3
