IMO I don't see what the issue is which keeping XBOX around if it is making money. The argument that they could shift manpower into areas which make them a higher ROE is a bit faulty. For one, all the hardware engineers don't really even fit into the company if they go services based. Game designers would just go to other game studious. Honestly the only people who they could put into new positions are the ones who manage the Interface OS, but even they I have always felt like the XBOX OS team was their "B Team" anyways.
See all this MS stuff they want to can is the shit Balmer came up with to fight apple (more of a hardware focused company) but instead competing with apple they are getting beaten badly in consumer HW products and have lost a bit of their core business.
End of 2009 Predictions (Set, January 1st 2009)
Wii- 72 million 3rd Year Peak, better slate of releases
360- 37 million Should trend down slightly after 3rd year peak
PS3- 29 million Sales should pick up next year, 3rd year peak and price cut
