cost of materials for making a game is nothing
so more units = more possible games sold
at $60 per game they will do just fine
the original Xbox lost plently of money on the hardware, and I don’t doubt the current one is doing much better
http://www.sematopia.com/?p=39
http://blog.tmcnet.com/blog/tom-keating/video-games-gaming/xbox-360-as-loss-leader.asp