I disagree, Microsoft has a lot of money in their pocket from this generation.

When it comes to finacil success in video games no one can come close to Nintendo the only system they really lost money on was the Virtual Boy.  Aslo they are geniuses when it comes to marketing which is a large part of their success.

Not a succes in financial terms, which is what the third console curse entails. 

Well they lost money last year didn't they. I wasn't really talking about that though. Financial succes is also not as easy to define as 'this console was profitable', it's also relative to your company's previous products on the market. 

"Microsoft has never officially released any information indicating the true cause of the problem. Therefore, any information available to the public has come only from speculation and third party analysis.

Electronics industry newspaper EE Times reported that the problems may have started in the graphics chip. Microsoft designed the chip in-house to cut out the traditional ASIC vendor with the goal of saving money in ASIC design costs. After multiple product failures, Microsoft went back to an ASIC vendor and had the chip redesigned so it would dissipate less heat.[34][35]

German computer magazine c't blamed the problem primarily on the use of the wrong type of lead-free solder, a type that when exposed to elevated temperatures for extended periods of time becomes brittle and can develop hair-line cracks that are almost irreparable.[36] The article also revealed that representatives of the three largest Xbox 360 resellers in the world (EB Games, Gamestop and Best Buy) claimed that the failure rate of the Xbox 360 was between 30% and 33%, and that Micromart, the largest repair shop in the United Kingdom, stopped repairing Xbox 360s because it was unable to fully repair the defective systems. Because of the nature of the problem, Micromart could only make temporary repairs, which led to many of the "repaired" systems failing again after a few weeks. At that time Micromart was receiving 2,500 defective consoles per day from the U.K. alone."

http://en.wikipedia.org/wiki/Xbox_360_technical_problems

I was going to write a response to this topic, but you said everything I was going to say. That's for saving me the time. You are 100% correct on each point.

I will add that the lead free solder thing went like this. MS designed the Xbox 360 with lead solder in mind, which would hold up just fine at higher temps. The EPA outlawed lead solder and MS was forced to replace it with lead free which isn't as good at higher temps. MS was forced to go to market with a compromised product or start from scratch and redesign the whole thing. They couldn't delay so instead they hoped for the best. The worst happened, but they extended the warrantees and set out to fix the issue in future models.