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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.

At this stage the hardware cost is moot. Live subscriptions and licensing (I believe I once read it was $7 per disc on the original XBox, I don't know the figure for the 360) will ensure the platforms profitability.