They can give it up right now if they are going to charge $500 for the XBox. Can we say 3DO? Let's hope it's really only $300, which is still high IMHO. The sweet spot is $150, or free.
No matter what they are going to lose a lot of money on these things:
A) I wager that some slashdotter will figure out how to get Linux to run on the XBox days after the release. There goes hundreds of thousands of units that will never see any game sales.
B) Someone will crack the DVD format and pirate the games like mad. DVD RAM drives will be almost common this time next year.
I figure it is going to cost between $400 - 500 to produce a unit. If they sell at $300 they are looking at a $100 - 200 loss per unit sold. They stand to lose a lot of money on this effort if things do not work out. $500,000,000 allocated to marketing alone.
I just cannot get excited about the Xbox. There is just something "wrong" about Microsoft orchestrating all the details.