I'm pretty sure, hell I'm 100% sure that MS is still making a profit on the Pro and Elite (obviously the Elite is a no brainer) models. The Arcade is the one rumored to having them lose money, but I'm guessing close to breaking even as possible.

The RROD is still there regardless of what anyone says. Reports are trickling in of Falcon deaths. Yes they are few and far in between (If it was higher then 10% the boards will be flooded with broken 360 issues on XBox.com and other boards, this is not the case for the falcons although there are some reports... we shall see in two more years). However, MS has steam lined the RROD repair process so well that I doubt they are losing as much as everyone thinks on the repair issue. Don't forget they charge 100$ to fix RROD or one light of doom out of warranty, and Launch warranties expire in three-ish months so either people will be buying new consoles or paying 100$ to repair them.

Third party exclusive support? Well most of It is timed or PC/360 only. Don't see the problem there, MS is paying but not a lot. I'm guessing they paid Square-Enix and Epic games more then anybody.

Lastly, MS is in this for the long run. They want to get in every household just like Windows. They succeeded with Windows, now is the time for them to succeed with consoles. Even if MS comes in second they view that as a victory because they know they can't stand to the Wii, who can?

I think they might have done it to increase their userbase, which will help them in the longrun.

omg why people still talking about RROD.
RROD is history. new 360 is now perfect.

HELLLO??

The Latest price drop was DELAYED for more than 6-12 months until they sorted out the problems. They had budgeted for this cut a long time ago, but wanted to use the headstart they had, and stock in the channel to make sure they rid themselves of the problem.

Now that its sorted, and the new platform is being produced, it seams the only problem they have is shipping enough stock to market (hence stock shortages)

warranties are for 1 year.

Are you an electrical engineer that is very familiar with the 360's internal design?  No?  Then how can you claim the RRoD problem is unfixable? 

The 360 can offer reduced price points because they chose not to use their customers as a way to get an expensive optical format into people's homes.  They chose not to use a CPU that forced developers to spend extra time and money on and in the process lose profits.

As far as profits go it's strange you weren't bitching when Sony was losing loads of money on the PS3.  Hell they're still losing money on every PS3 sold and yet I don't see you complaining in the Sony forum and demanding that Sony raise the price of the PS3.  Did you really think Microsoft was just going to roll over and let Sony take second place?

Sony fans desperation all over the Microsoft forum. lol

Jaspers launch coincides pretty closely to the price drop. The die shrink should have neted them a pretty significant savings on hardware costs. I don't know where that leaves them profit wise per unit but I would think Elite and Pro are still money makers and the Arcade is break-even or loss.

I think he is refering to the 3 year general hardware failure(RROD) warranty. Only a few months left on mine. 

You can substitute your theory with PS3 and then try to come to a conclusion. 

Sony is loosing money on every PS3 right now.  Good blu-ray player cost around $300.00 (cheapest one is about $200) there is no way that PS3 cost is $99 even without the blu-ray unit.

They already said they probably won't recoup all the developement cost of PS3 (read blu-ray & cell).  (Just like MS lost billion on their RRod Debacle)

While MS pump a lot of money in to catering 3rd Party Dev, Sony is spending million on their in-house developement.  Home, KZ2 etc. 

Discuss if you want.

Its things like using GDDR3 for the memory in the console instead of more expensive XDR which are contributing to the cost reductions and the price cuts. Its litterally cheap as chips for them to make the stuff now.