Back on topic any thoughts on what the November sales might have cost MS? Taking the games out of the equation BC I don't know the nature of the agreement. It seems to me it might be pretty close to a wash especially if you consider that most will be inclined to buy a Live membership. If I'm MS the subsidy might very well be looked at as a marketing cost BC we all know each sale at this point in generation has some multiplier associated with it when friends decide to buy. I'm thinking the cost over time might not be that bad.
Interesting question - I've never sold consoles, but I used to work in Telecomm marketing.
Cost of Acqusition of a new client was expensive, but each time we sold an iPhone, that generated $6000 revenue over the lifetime of the contract. It was absolutely critical to be stocked full of handsets prior to any launch. You are almost always better to have excessive inventory (cost of iphone is 1000) than to lose the sale ($6000 revenue lifetime).
Manufacturer of those sets also provided discounts etc. But that being said, if the attach rate is _very_ good with Xbox, or they anticipate many purchases through their Video, Music, Live Services, game services (ie EA Access) and just a lot of purchase of games, they could rate the revenue off each customer being potentially very high. Once you surpassed your own lifetime revenue, I believe you are considered 'gravy', much like how we treat home land lines that we charge $50 a month for an infrastructure that was paid for umteen years ago.
To date I've already bought 18 titles ($400+) in 2014, a year of live, 1 seasons' pass for TF and I've rented several movies off Xbox Video. There is still 5+ years left. If there was ever a time to do a fire sale, that time is now, the value of the customer is going to drop as time goes on. For both consoles having tremendous sales now or front loading it should lead to higher revenues than dispersing it over the life time, as everything in gaming appears to depreciate very quickly. (ie, look how fast the barrier to entry to X1 dropped!)