smegforbrain said:
It's a well known fact: MS was losing money with each XBox sold.
Read that again and you'll see that it really makes no sense, no matter how much you want to say it.
Let me explain how it works: Microsoft manufactures the console. They sell it to a distributor (EB, Future Shop, etc), who buys it from Microsoft. It's up to the distributor to buy the amount of Xbox consoles they need. Microsoft sells it at a certain price for a certain amount of profit and the Distributor inflates the price to make their profit off of the consumers (Me and you).
Microsoft is not losing money if the distributor is not selling them fast enough. It's the same with the Xbox games. It doesn't exactly cost a fortune to create the CD's, or the casings. What costs the most is the amount of work put into the actual game, and that is recompensated per game sold. If you buy Halo 2 from EB brand new for about $69 (Canadian), it probably cost EB less to buy it from Microsoft, maybe for $48. It probably costs even less to manufacture the disc, the case, and the booklets.
Xbox 360 shouldn't be much different, but in one way I do agree with you: IF the first Xbox was in fact a very weak console compared to the 360, and the Xbox could have been better and more powerful than it is, it should have been better and more powerful. Some of the games for it could have really used the extra power.
However, lets not forget that it's their first console, and it was released 3-4 years ago (I'm not really sure, I'm leaning more towards 2001). They were pretty bad at the gaming scene before (Urban Assault, anyone?

), but I'm sure it will get better with the Xbox 360. Look at the trailer(s) for Ghost Recon 3. I was drooling the entire time.