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Microsoft's Xbox 360 Division Sees Q2 Profit
by Brandon Boyer
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January 24, 2008
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Microsoft has announced the results of its fiscal 2008 second quarter, showing Xbox 360 and PC hardware and game sales up $115 million over the year prior, as the company sees overall sales of $16.37 billion and operating profits of $6.48 billion.
The overall results are a 30 percent rise in sales and 87 percent rise in operating profits. The company's entire Entertainment and Devices Division, which houses Xbox 360 and PC gaming as well as Zune and set-top devices, saw a 3 percent rise in revenue to $3.06 billion, and $357 million in operating profit, up from losses of $302 million the year prior and.
[UPDATE: In a largely placid analyst call following the results, Microsoft CFO Chris Liddell noted that the Entertainment and Devices Division had its "second consecutive quarter in the black", and he believed that it was "on the road to full year profitability", presumably a sign of maturation in the company's business model for the console.]
Over the company's first six months, sales were up 25 percent to $4.99 billion and operating profits up from $423 million in 2006 to $524 million.
Microsoft says that its quarterly Xbox platform and PC game sales rose $115 million from the year prior, on "increased Xbox 360 video game sales, Xbox Live revenue, and Xbox 360 accessory sales, partially offset by decreased Xbox 360 console sales."
For its first six months, Xbox platform and PC game sales were up 35% -- $1.0 billion -- compared to the year prior, "as a result of increased Xbox 360 console sales, video game sales led by Halo 3, Xbox Live revenues, and Xbox 360 accessory sales."
Microsoft notes that it shipped 4.3 million and 6.1 million Xbox 360 consoles in its second quarter and first half, respective, compared to 4.4 million and 5.4 million the year prior. It adds that life to date sales of Xbox 360 has reached 17.7 million units, up 70 percent from the prior year.
"For the remainder of fiscal year 2008, we expect revenue to increase due to increased sales of Xbox 360 consoles and related games, accessories, and services," the company said.
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