I am relived that almost everyone in this thread sees this as non-news.
Selling the console at a loss to make profit on games has been the way for so long. Typically within a year or 2 they start to break even on hardware.
I remember being in 1st grade and my older cousin explaining to me that Nintendo was selling the SNES at loss because they make money on the games.
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