Like any company, MS tries to hide its costs from competitors. So they lump Xbox in with other businesses like MSN or the hardware or games group. That makes it harder to estimate the exact cost of the Xbox project, because you have to guess how much the other parts of the same businesss unit made or lost.
It's also difficult to come up with a number, because you have to decide how much of some expenses is directly related to Xbox, vs. something else. For example, they bought Bungie for the Halo game, but Halo will be ported to the PC. So do you count the aquisition cost at 100% for Xbox, or 80% Xbox, or what? And since Bungie will continue to create new games, is that even really an expense at all? Or is it an investment?