Not every venture can completely pay back its initial costs in a short time period. It took Amazon.com an entire decade to finally start making an annual profit. The XBOX division is now on a very solid track of success, with significant annual profits and a substantial growth trend. This is hardly a failure any more than a family 10 years into paying off a 30 year mortgage is a "failure". The XBOX division has become a substantial profit center for Microsoft and will almost certainly turn a lifetime profit sometime in the next few years.

This is the nature of the game in the tech industry, significant returns are rarely achieved without significant risks and investments.