I'm pretty sure, hell I'm 100% sure that MS is still making a profit on the Pro and Elite (obviously the Elite is a no brainer) models. The Arcade is the one rumored to having them lose money, but I'm guessing close to breaking even as possible.
The RROD is still there regardless of what anyone says. Reports are trickling in of Falcon deaths. Yes they are few and far in between (If it was higher then 10% the boards will be flooded with broken 360 issues on XBox.com and other boards, this is not the case for the falcons although there are some reports... we shall see in two more years). However, MS has steam lined the RROD repair process so well that I doubt they are losing as much as everyone thinks on the repair issue. Don't forget they charge 100$ to fix RROD or one light of doom out of warranty, and Launch warranties expire in three-ish months so either people will be buying new consoles or paying 100$ to repair them.
Third party exclusive support? Well most of It is timed or PC/360 only. Don't see the problem there, MS is paying but not a lot. I'm guessing they paid Square-Enix and Epic games more then anybody.
Lastly, MS is in this for the long run. They want to get in every household just like Windows. They succeeded with Windows, now is the time for them to succeed with consoles. Even if MS comes in second they view that as a victory because they know they can't stand to the Wii, who can?
It's just that simple.
