...and desperately attempting to avoid irrelevance.
That being said, there's some sense to the strategy. If it's true that they lost money on the original Xbox, then it's worked for them in the past. Selling products below cost is a good way to get customers, provided your product is good enough that they'll buy your next one at a price where you'll actually profit.
I don't personally see Microsoft tablets being taken seriously (the number of people I see on the internet who apparently like Windows 8 doesn't fit with the number of people I've met who like it in real life, which leads me to believe that they learned a lesson from Vista -- albeit not the right one -- and have seen the value in paying astroturfers to pad their failures a bit). But then again, I didn't expect the XBox to be a runaway success either, and it did just fine, so time will tell.
Fortunately there's enough competition in the tablet market among Apple and all the different Android manufacturers that Microsoft isn't likely to be able to achieve the level of lock-in that they have on the desktop market, which means that another viable tablet maker could actually be a good thing. So even though it's Microsoft, I don't wish them ill here.