I think they could make a profit if MS acquired them. Xbox console sales in Japan would be boosted by a Sega acquisition for sure, especially if they marketed it as a Sega console. Xbox ecosystem is Xbox/PC/xCloud streaming, and xCloud has definite potential for success in Japan I think, Japan loves playing games on mobile, which xCloud allows. MS could do late Switch ports for all Sega and Atlus games if they needed a bit more money per game, MS doesn't see Nintendo as competition in the same way they see Playstation as competition.
It's amusing that people actually think that would work, Sega made consoles for 13 years in Japan and haven't released a home console in 22 years! This idea there's a substantial audience for a Sega console is laughable specially when even Sony is struggling to move significant units which has 26 continuous years of prominence.