It's hard to guess at what point console hardware is profitable or loss making but the companies themselves are never going to give true information on the cost of manufacturing. They want consumers to perceive the consoles are good value. Clearly though consoles are much simpler in components than PC's for example and are manufactured on a far higher volume with economies of scale. The big issue with consoles is the R&D costs which have to be factored in. The cost of manufacturing in China has increased though.
I know I won't be buying a Xbox one for a long time. When I buy i will be to play exclusive xbox one games with single player campaigns. Microsoft doesn't seem interested in me as a consumer so really I will wait until the console is much cheaper and I'll still need about half a dozen games to justify purchase. As a package it has to be a lot less than ps4 in pricing for me.
Clearly in mainland Europe the xbox one needs a serious price cut. It doesn't even have a foothold currently there. Here in the UK its better. Microsoft need to focus some attention on the rest of the world. It's doing good in the USA but surely they don't want the xbox one to be seen as a console for the USA only.
Nintendo's wii u doesn't need to be a powerhouse to run Nintendo software which have low performance requirements from the hardware as normally fairly simple games with cartoon graphics however Microsoft is not like that. The original xbox was hugely powerful for its day with a large advantage over competing consoles at the time. The 360 beat the ps3 for most multi-platform games and was very powerful but this new generation the xbox one is at a low performance level yet previously xbox was always about great performance. Lower than ps4 and even entry level gaming PC's. So you have a console with low performance at quite a high price, expensive games that don't perform that well technically and much functionality of the console behind a pay-wall. You don't even have backwards compatibility to extend the available software it can use. It's not a great package to say the least.
Microsoft desperately need a lower price in mainland Europe to stay in the race. A price that may be low compared to the USA but without it they risk losing Europe entirely with Europe ending up like Japan with regard the xbox brand. I.e. a niche console on the fringe of gaming like the wii u has become.
