One has to realize that Microsoft has publicly stated that they <b>expect to lose two billion dollars</b> on Xbox. That is some serious, serious, serious cash.
Think about this for a second: Microsoft has some $40 billion dollars in the bank. There are 30 million PlayStation 2's out there. Microsoft could buy every PlayStation 2 owner an Xbox, ship it to them and still have some $33.4 billion in the bank. That's cash.
Then they could buy each of those people ten games to go with their Xboxes (at RETAIL, we're talking) and still have some $18 billion in the bank. And that's including shipping of both boxes to the customer.
Or... a controlling interest in Sony is only $26 billion...
At current rate, Microsoft's bank account grows by around $1 billion each month.
Microsoft is in this for the long haul. They don't care about losing money. They care about getting a good Microsoft product into the living rooms.
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