A dubious source.
MS was taking a $200 loss on the original console, so $126 seems to be fair today.
What I don't understand is how MS is permitted to get away with it: the FTC (Federal Trade Comission) that regulates such things as unfair pricing, price gouging, and undercutting a competitor (all of which are illegal in the USA) has not been brought in (that I know of). I believe that MS is using a legal loophole by which the box and the games make up the whole product.
So while MS is loosing money on the consoles, it's gaining on the sales of games. Has anyone compared the pricing structures of the console-games for MS/Sony/Nintendo? That would be an interesting exercise.
Water Block Testing Alliance (www.wbta.us)