Microsoft isn't even interested in the video-game market. It's just a means to an end. They're interested in infiltrating the modern home and using their "game console" to leverage subscriptions, services, and other devices. It's a gateway, a beachhead. As such, to them, it's more important than it's own numbers.

This.

The original Xbox was never profitable for them, and sold jack shit compared to the PS2. If they were willing to stick that out just to get a foothold in the living room, I doubt being outsold 2:1 will push them away.

Besides, they don't have any other products more capable of reaching that goal. It's not like Surfaces and Windows Phones are flying off the shelves compared to their competition either.

No, 40-50 million at it's worst is still a ton of money being made there. Still a ton of software money, xbox live subscriptions, and xbl tv to push. At the end of the day, it depends on how much THEY make not how much their competition makes.

Not if they are making a substantial profit.
Otherwise pokoko's post sums it up pretty well.

I could see them selling it or splitting the division off, but no the system wouldn't just be discontinued and abandoned.

We must wait and see the new CEO point of view on this. But uncle billy still wants to own the living room, same for Ballmer, so I don't see this happening.

They prefer to take loss and have a console and you living room then giving some other business marketshares on what may be the future of multimedia.

Apple and Google own the mobile market share, yet Microsoft still supports their Windows Phone

As long as they profit, no.

Now, I am not a Microsoft expert but I do have a 4 year degree on business, now I can tell you this, No matter how much money Microsoft has in stocks, bank, assets and rights, doesn't mean they are making money on their xbox division, as far as I know it's NEVER been profitable, I mean "Windows" has always been Microsoft's bread and butter, that $200 price tag every computer maker must pay them for every PC they make, thats their main income, I'm sure they make a ridiculous amont of money with the android market and all that.
I'm sure most of you are right, that they wont mind bleeding money as long as they are inside our living rooms, however, if the differene between Sony and them goes back to the PS2/Xbox days after almost being tied just last generation, they'll make a drastic move, believe that.
For those of you who think Xbox division is profittable please read this 4 month old article by forbes.
http://www.forbes.com/sites/erikkain/2013/11/08/microsoft-earns-2-billion-a-year-from-android-is-it-time-to-drop-xbox/

It's kind of a dead end really though. The main reason they really got into the game business was because they were worried that the Playstation represented a threat to the Windows monopoly. 

What they didn't realize then is they should've been paying attention to Apple and Google and not Sony (who today is just trying to keep it's head out of bankruptcy). 

XBox as a whole has been a miscalculation for Microsoft in the larger scheme of things. The television never was the key to the next OS boom ... it was the iPod - iPhone - iPad transition that caught them blind sighted.