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Landguy said:

I doubt that M$ is losing anything at $349...

I'm fairly certain (but not 100% positive) MS is taking a loss at $349. The reason MS is putting the basic system price back up to $399 in January is either an attempt to put pressure on people to buy now rather than later (further buffing up their 2014 holiday sales), or they really are taking a loss on these systems and are only willing to eat that loss for the holiday season.

Not that MS couldn't just shrug off a $50 loss per system sold, but the Xbox loses enough each year that they probably don't want to add much more onto it for the 2014 fiscal than they have to.

(Just my take on the situation - could be entirely wrong, but I don't think I'm too far off.)