Xbox 360 Division Pushes $165 Million Profit For MS Q3

Author: by Staff

The Entertainment and Devices Division of Microsoft, which includes the Xbox 360, PC games and Zune, showed a $165 million profit on revenues of $1.67 billion for the quarter -- alongside record revenue of $14.5 billion for the company as a whole for that period. For the first three quarters of the company's current fiscal year, Entertainment and Devices Division revenues are down five percent, to $6.46 billion from $6.68 billion. However, profits are up a tremendous 242%, moving from $249 million for that period of 2009 to $851 million so far in 2010. The company shipped 8.8 million Xbox 360 consoles during the first nine months of its 2010 fiscal year; 10 million units were shipped in the same period of its fiscal 2009. Revenue per console has dropped thanks to drops in price for the system. The statement the company released says that, for the quarter, the changes are "primarily reflecting an increase in Xbox Live revenue and non-gaming revenue, offset in part by decreased revenue from Xbox 360 video games and decreased Xbox 360 consoles sold." Last year, the company shipped Halo Wars in its third quarter, but there was no similar hit title during the same period of this year. Xbox console shipments for the quarter were down, too: 1.5 million versus 1.7 million in the same period of 2009. While a 22 percent decrease in the cost of manufacturing the Xbox 360 helped trim costs for the company, the cost of operating Xbox Live increased in the period, and R&D efforts were stepped up, increasing by $31 million. Xbox 360 and PC game revenue decreased by $240 million over the nine month period, says the filing, due primarily to "decreased Xbox 360 consoles sold, decreased revenue per console, and decreased revenue from Xbox 360 video games, offset in part by increased Xbox LIVE revenue." The company has also stepped down marketing efforts for the Xbox 360 console so far this year -- by $60 million, or 6 percent. The Entertainment and Devices Division also includes Windows Mobile, Microsoft Surface, and other products. The tech giant as a whole saw revenue of $14.50 billion for the quarter ended Mar. 31, 2010, a 6 percent increase from the same period of the prior year, and $4.01 billion in profits, up 35 percent, thanks to the success of Windows 7's launch, as well as "strong growth in other areas like Bing search, Xbox LIVE and our emerging cloud services," said Peter Klein, chief financial officer at Microsoft.