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Getting All 1,700 Parts of the Xbox 360 to Market
Carl Bialik from the WSJ writes "Microsoft is hoping its Xbox 360 will further the company's goal to 'link the Web and entertainment of all forms in consumers' living rooms,' the Wall Street Journal reports, but 'one manufacturing misstep -- a shortage of graphics chips or a recalled hard drive -- could derail those ambitions and drag Microsoft's unprofitable videogame business even deeper into the red.' The WSJ traces the 1,700 parts that go into the device through the supply chain -- from two southern China factories, Rotterdam, and on to Toledo, Memphis, and ultimately, retailers in the U.S. -- and looks at what could go wrong along the way."
Actually they don't fully make up for all the costs, as TFA points out they've lost 4 billion dollars so far.
Microsoft doesn't exactly own the rights on the components, but it's pretty close to. According to the Anandtech article, they have a license to manufacture the CPU. Likely (personally, I haven't confirmed it, but it seems probable), they have a license to manufacture the rest of the components as well. So you're correct that they can find another supplier if someone screws up.
"Full rights" to the CPU would mean they could also, for example, modify the design and license others to use their modified design. Suddenly, Microsoft becomes a powerful player in the embedded processor market by selling other people a chip that contains the results of decades of IBM R&D. IBM would, most likely, never let anyone do that, not even Microsoft.