Why do people STILL say Microsoft is losing money off XBox 360?

Stop living in the past.

"In contrast, the $400 Xbox 360 only costs $323.30. For the first time in its five-year console publishing history, Microsoft is making a profit on each system sold."

http://ps3.ign.com/articles/746/746482p1.html

Because M$ reportes about $300 million lost.loco145

Thats including the whole (nearly) a year before they reduced manufacturing costs by 40%.