Are people saying this because the Xbox actually makes money, or just because it’s popular and seems successful? The most recent overall look at profits I’m aware of is this one: http://www.neowin.net/news/report-microsofts-xbox-division-h...

If this is accurate, Microsoft has been turning a profit in recent years, but not enough to make up for years of losses from the first Xbox and the first few years of the Xbox 360. They’re about to launch a new system, which probably means they’re again going to be losing money again for a while.

Mindshare and a device in the living room is what keeps Microsoft from slipping into IBM territory. And with the consumerization of IT, OSX or Linux would be even more present today I suspect.

One almost gets the impression that Xbox slipped under Ballmer's radar and didn't get his full attention :-)

I loled. I have thought this as well. something along the lines of he was concentrating on office when a division of microsoft was able to continue working without his interruption.