He's right. For all the hoopla and hullabaloo MS is getting from the gamer section, from a business perspective the Xbox 360 is a big flop. It's almost like a CHARITY.
For reference, and AFAIK, MS has only ever had one profitable quarter, Q4 2004, They made about $54 million. This required Halo 2 to sell about 4 million units. The rest of the years losses brought their yearly total back down to loss.
Here's a record of all companies gains and losses:
FY* Sony** Nintendo Microsoft
1998 974,000,000 629,000,000
1999 1,130,000,000 645,000,000
2000 730,000,000 421,000,000
2001 -409,000,000 726,000,000
2002 623,000,000 800,000,000 -750,000,000
2003 939,000,000 560,000,000 -1,191,000,000
2004 650,000,000 316,000,000 -1,215,000,000
2005 404,000,000 777,000,000 -485,000,000
2006 75,000,00 894,000,000 -1,262,000,000
2007 -1,057,000,000 1,150,000,000 -384,000,000
Totals 4,059,000,000 6,918,000,000 -5,287,000,000
See how MS has never made one cent on this entire endeavor? If they do have a profit strategy, they had better enact it soon. Microsoft has other troubles.