Was Xbox more about getting a presence in the living room than turning a profit?

Peter Moore: It was certainly very important. We couldn't afford not to be - we believed that broadband connections were going to move out of the bedroom into the living room, which they have done, or that wireless networks were simply going to take over and your broadband connection would be ubiquitous around the house. There was a huge bet they made on the original Xbox, not to put in dial-up, just to put a broadband modem in there at a time when the great majority of people were still connecting via dial-up modem - it was a ballsy bet to say, ah we don't care about you, you're a bunch of luddites we're going to move on to the people who connect the real way.
And in the same way, not having a hard drive in every Xbox 360 was a hard decision, but we wanted to get price under control. The hard drive in every Xbox killed us; we we're still selling it at $199 and the hard drive was like $70. That's why we prematurely left the original Xbox, because the more we were selling - there was still great demand - it was killing us, and there was no way to bring the price down. So in the end we determined at around the 25 million unit mark that we just needed to slow this thing down and just not sell any more, and move to the 360 as quickly as we possibly could. And to this day people still believe we left the Xbox too early but it was purely for financial purposes.

Wait, you mean to tell me, well US, that an 8GB or 10GB hard disk was $70.00?  They are standard IDE hard drives, with locking capability.  There is no way I will believe that those small in size drives cost that much money, even back then. 

The Xbox was done because nVidia would not make the GPUs anymore!  They need to get their stories straight! Now they're saying it was because of the HDD, but when it was discontinued, they said it was because there were no more GPUs being produced.