Microsoft's Xbox Division Posts $524M Profit

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Microsoft's Entertainment and Devices division, the portion of the company responsible for the Xbox line of video game consoles, has brought in profits of over $500 million across the past six months.

Financial documents from Microsoft reveal that, during the first six months of the company's 2008 fiscal year, the entertainment division brought in $4.98 billion in revenue, marking an operating profit of $524 million. During the same time period in the 2007 fiscal year, the division amassed $3.98 billion in revenue but reported a loss of $423 million.

In all, the division is known to have lost over $7.17 billion--$1.89b in the 2007 fiscal year, $1.28b in the 2006 fiscal year, and upwards of $4b before that. The company had long expected the division's first profit to materialize in the current 2008 fiscal year.

Though the division is also responsible for the Zune and other entertainment products, Microsoft attributed the profit to increased Xbox 360 software sales. Lower Xbox 360 manufacturing costs and lower marketing costs also contributed, leading to a $523 million reduction in the division's overall operating cost.

Overall the company shipped 4.3 million Xbox 360 units in the quarter, adding up to 17.7 million since shipped launch, with a total of 9.15 million sold in North America. As previously reported, Microsoft reported the whole of its $1.06 billion loss due to the Xbox 360 warranty extension in its 2007 fiscal year.

Chris Faylor was previously a games journalist creating content at Shacknews.

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    January 25, 2008 9:49 AM

    Don't forget that they also charged all of the estimated warranty replacement charges to the previous fiscal year.

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