Makes no sense. Games are still coming out for it. I actually expect some special hardware deals to celebrate 10 years this fall. It's also a gateway into Xbox Live, sells crazy amount of software, and has more pricing wiggle room. If there is any truth to this rumor Microsoft is not very intelligent.
http://www.youtube.com/watch?v=F1gWECYYOSo
Please Watch/Share this video so it gets shown in Hollywood.