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hanafuda said:
I've still yet to see anything to prove MS are making a profit on the new low price points.

I'd say that's a key point to clarify before jumping to any conclusions.

They are still making a profit. 

I was just with my Edward Jones guy (financial advisor) last week and he can pull up any publicly traded company I want to look at.  I had him look at Apple, Microsoft, and Google.  I spent the most time looking at Microsoft.  Yeah, I'm just some guy on a web forum saying this, so most of you probably won't believe it, but again, this is what I read (in a nutshell):

1.  Microsoft is considered a healthy and growing company: buying shares is definitely recommended at the moment.

2.  The Xbox 360, and the gaming division in general, is profitable and the strong sales are generally matching what analysts have predicted.

3.  Windows Vista and Office are still making them lots and lots of money.

I don't think Edward Jones would be the company they are if they lied to potential stockholders about the status of the companies they analyze.  And from what they're saying, MS is going to have a VERY strong holiday season this year.