Microsoft's Games Division Posts First Ever Quarterly Profits

By Carlos Bergfeld, Oct 25, 2007 3:04pm PDT Buoyed by phenomenal launch week sales of Bungie's Halo 3 (X360), Microsoft's Entertainment and Devices division posted its first ever profitable three-month segment for the current fiscal year's first quarter. The division, which encompasses all of Microsoft's hardware and software gaming endeavors, recorded quarterly operating income of $165 million, compared to last year's operating loss of $142 million, for the period ending September 30.

The division took in $1.929 billion in revenue for the quarter, a 90.8% year-over-year increase. Halo 3's $300 million first-week sales and its console-selling hype undoubtedly contributed heavily toward this figure.

The first quarter profits are a good sign for Microsoft, indicating the division is on its way toward a profitable fiscal year for the division overall--a goal Microsoft has been firm in reiterating. Absorbing the $1.06 billion in "red ring of death" repair costs during the last quarter of last fiscal year gave the company a huge loss overall, but paved the way for the new fiscal year and quarter to begin without the burden of repair costs.

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