360 has the best gaming recommendations if i am not wrong, but the ps3 is also doing quite well as its sales are increasing steadily

If you read the 10Q you can see more why the E&D division lost $31million.

Interesting things from the 10Q.

Mac Office sales dropped 63% compared to last year.
Currenct exchange rates cost division $38 million.
R&D costs jumped $66 million primarily because of investment into Windows Mobile (MS SmartPhone)
Cost of Revenue (Cost to make things) increased by $52 million. If all of that was to produce 400,000 additional XBox 360's (difference between last year and this year 360 sales) that comes out to $130 per console.

Clearly the reason for the division to have a loss was products other than the Xbox 360. The main driver for loss is Windows Mobile. Search the internet and you can find multiple analysts talking about reduced Windows Mobile sales as well as additional investments being made into the business to try and regain marketshare lost to the iPhone.

Again, revenue remained the same despite selling WAY WAY WAY less consoles and software.

And also, the costs were lower too, last quarter they invested heavily in marketing.

So yeah, its simply down to internal investments rather than the 360. If the 360 was being sold at a loss, then there wouldve been a huge loss last quarter.