Yeah, I just don't think its as bad as they say. Right?
Maybe they plan on making a small profit on the new "360+".

Is any console really.....alive?

I'm not saying 100% sure your wrong BUT it seems odd that if suddenly microsoft are making money on each xbox 360 sold despite price cuts when with the original price they were losing $126 per console sold. You'd think microsoft would boast about it if this has happenend.  Companies will use anything for PR.

Your right about how technology envolves, but this still falls back to the "why haven't they said anything about it"?

Unfortunatly since 2005 no one has actually measured if each 360 console sold makes a profit or a loss for microsoft, prehaps its not still $126 but the odds of it being a profit is marginal.

Consoles can walk?

With all this talk about the PS3 price point, the focus hasn't been on what should be cut the most- PS3 development costs.

i am a playstation support all the way because the ps1 was the first games machine i had and i like it, i have a ps3 and think its great BUT if sony dont drop the price this xmas then its over, no 10 year plan will save it. this xmas it MUST hit £199 in order to stay in the game, alot of people are like me and will only have playstation and they are waiting for the price to come down. if it doesnt then ps3's just wont sell

however, ps3 has sold pritty crap so far this year, espesally recently, and if Sony want to hit 14,000,000 sold by march10 then they must have a massive cut planned, if they drop the price to £250 then all the kids wil say mum i want a ps3 for xmas and they will get a wii or 360

You are never going to have concrete production costs provided by the manufacturers. They treat them as corporate secrets. Worse yet they are never going to leak due to the spread out nature of manufacture. Few are privy to all the figures. You may get a piece here or there, but your never going to see the entire picture.

What we are left to work with are precedent, deduction, and calculation. They are not necessarily very specific, but they can get you fairly close to the actual figures which are changing all the time. We have a good estimation of how quickly manufacturing costs decline over time. How much the given components cost wholesale. We can even parse statements out to verify our range.

That all said its fairly safe to say the 360 is being sold at a profit, but I wouldn't wager that it is a large profit. I would say it averages out to twenty percent. With the Arcade probably making less then ten percent, and the Elite probably closer to thirty percent. Then you also have what are called the secondary streams. Those are subscriptions, accessories, licensing, and advertising. So there is really very little doubt that Microsoft on average has probably made money for every machine they have sold.

You can even find proof of this in comparative analysis. The PS3 launched in the United States for six hundred dollars. Today it is four hundred dollars, and Stringer says the machine isn't quite breaking even on manufacturing costs yet. No matter how you parse it that means Sony was able to cut the cost of their console by almost two hundred dollars off of the retail price, and as we all know its basically a matter of precedent that even at that price the PS3 was being sold at a significant loss. Billion dollar losses have to come from somewhere after all.

Even though Microsoft hasn't taken a cutting torch to their console. You have to at least expect them to have matched that performance with an additional year of manufacture under their belt. So it is safe to say even if your extremely pessimistic the 360 is profiting off of two of the models. Which make up the majority of their sales.

Flame bait....

They really don't need it unless they start making profit.