Video games platforms are a cyclic industry. It's unprofitable during the first few years when they launch their new system then it becomes a cash cow when hardware gets cheaper to produce and they don't have to spend too much yet to launch the next generation.

I believe that overall, Xbox will be profitable for Microsoft, it gives them a foot in the user's living room and could be used to stream content onto their TV. But wildly profitable ? Probably not. You've got to be Nintendo to do that : sell your hardware with a good margin from day one and sell millions of every Mario/Zelda game that you release.

Nintendo is king because they build the hardware, sell the software and have the vision thanks to Miyamoto. It's really the Apple of video games.