Re: The last time Microsoft decided to go it alone with hardware...
Really make money? The problem is, too many kids on the internet too stupid to understand how business report earnings.
Microsoft won't make a single dime from the Xbox this generation, because of the $11bn poured down the drain (development costs and RROD cover).
What Microsoft did (and what lots of other mostly American companies do), is pile all their losses into a single REALLY bad quarter, and then claim the next quarter looks rosy. Microsoft "reserved" a huge boatload of cash to cover RROD warranty claims, and drew from this pot (and topped it up) many times over the years. However it mean the books LOOKED like they were making money.
In the same way, Microsoft channel stuff at the end of a particular slow quarter, pushing more stock into the channel to bolster the "shipped" numbers. They did this famously with Kinect, and claimed 8m shipped soon after launch, but a whole year later, they had still only sold 10.1m The reason: They lied about those 8m....