I don't think they see this as recouping losses from past years (remember that the company as a whole posted record profit) They run their company similar to mine... don't look to hard at individual losses if it helps out the company as a whole... xbox brand helps microsoft brand name which can help windows and office sales (their bread and butter)... so i think they are willing to swallow a 500 million dollar loss if it means 3 billion dollars increased profit from other divisions (which are all located within the same campus in Redmond BTW) this is different than a company like Sony which branches itself over multiple divisons that don't really talk to each other (because they are separate incorporations, BMG and Vaio are not really the same company, just affiliated). This makes any one division more likely to be squashed even if it is helping the overall public image.
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