Actually, what you describe is illegal in most developed countries. Microsoft knows this better than anyone. They've been strung up for "bundling" and "predatory pricing" many times. Also, their position in their "monopoly" markets are weakening by the day.
You can use a monopoly to get monopolies in other markets. You go into those other markets and take losses, until all others have quitted.
Then, when you have another monopoly, you can earn back the money. It might not have worked so well in the hardware games consoles.