Microsoft's Xbox division turns Q1 profit, ships 2.2 million consoles

by Ludwig Kietzmann on Oct 24th 2008 9:25AM

Good news, everybody (concerned with the financial prosperity of a gigantic corporation)! Microsoft's fiscal Q1 2009 results, which cover the three-month period ending September 30th, 2008, show that its Entertainment and Devices Division -- the same one responsible for the entertaining device known as the Xbox 360 -- managed to turn a profit once again. According to Gamesindustry.biz, quarterly income rose to $178 million, an approximate 6.6% increase over last year's $167 million.

In less financially fortuitous news, overall sales were down from $1.929 billion to $1.814 billion (no Halo 3 this year, remember?) compared to Q1 2008, and revenue from the Xbox 360 and PC platforms went down by 22%. Though Microsoft still shifted 2.2 million consoles, the EDD was greatly aided by sales of Mac software, mobile device applications and the Zune. Seriously, people, we can't keep making fun of it if you actually go and buy the darn thing.

Source

Tags: BreakingNews, EDD, Financial-Results, Microsoft, Profit, Q109, Xbox, Xbox-360

Reader Comments (93)

Zune's are friggin awesome.

I don't know much about them, so this is a sincere question - what does it do that the iPod Touch doesn't? Or am I comparing it to the wrong iPod? Basically, why choose Zune?

I've been wondering this my self. My 30gb Ipod is slowly dying and I really want to know whether I should just get a new Ipod or invest in a Zune.

I wouldn't compare it to the touch, more so the classic. Its just a great little media player with more features, a ton of space and just more enjoyable then any ipod i've ever owned before.

You should not be comparing the Zune to the iPod touch. It would be fairer to compare the zune to the iPod classic, as the touch is more than just an mp3 player as it has web browser, email, applications e.t.c. and would thus be an unfair comparison. Clearly if you compare the touch and the zune, the touch trumps the zune in almost every aspect (bar the zune's built in fm transmitter)! This is also reflected in the price differences of the two.

However, comparing the zune to the iPod classic is a whole different story. In my opinion the Zune trounces the classic in almost every aspect, except the dimensions (it is chunkier). This post will turn in to an essay if I'm not careful, but generally the Zune gives you a lot more for cheaper than the ipod classic. A few quick bullet points:

* Ability to wirelessly synch.
* Almos the same screen size as the iPod touch, bigger screen than the classic.
* Built in FM transmitter
* More memory for the money
* I am told the sound quality is better, but my bro owns one, I have not personally listened to it.

The best thing to do is to just read up on the specs and compare them all to decide which one is the right one for you.

I'm going to stop before your eyes start bleeding....

No bleeding eyes here - thanks for the info. I wonder when MS plans to announce their own Zune Touch

I wouldn't hold your breath for one. For all I know they could be cooking up some top secret Zune touch but I doubt it. They need to build up the strength of the Zune brand more if they can hope to release some of Apple's stangelhold over the market. One way to do this would be to let Zunes work with Macs but I doubt that will happen any time soon! I wouldn't wait for anything along the lines of a zune touch from Microsoft, if you're looking to buy now then choose what's best for you.

Having said that I take no responsibility if they release a zune touch the day after you buy a player for yourself!

Agreed. I love my Zune. The interface is awesome, on the recent versoins (one of which I have), the controls using the pad are very intuitive and smooth--and you can flick. Now you can play games on it--and develop your own with XNA. Oh, and then there's the wi-fi sync and all that...

Ultimately, though, the real reason I use a Zune is because I can't stand iTunes--and iTunes hates my network-based cache of music. I won't get into it--but, if it doesn't find the network drive when it starts up, really bad things happen.

While I'm sure it doesn't go for everyone, the two big advantages for me are no god-awful iTunes on my computer, and while the sound quality isn't alongside the likes of Cowon (which I eventually upgraded too), it's certainly better than the iPod's tinny sound. I'm no audiophile, but I really don't understand how people listen to music on iPods. They make even the best songs sound like crap.

If I bought a stand alone music player, it'd be the Zune. My brother had an old one (and countless iPods) and the Zune's interface was so cool. It was also built like a tank. It's gone through 3 owners and is still going strong while he has had literally about 5 iPod videos/classics break. Me, I have an iPhone, so that's the only reason I don't have a stand alone music player.

@ Esat Dedezade:

nitpick... no FM transmitter, but rather an FM receiver. (I also heart my Zune.)

Damn, my bad I used the wrong word! Thanks for correcting me :)

I never thought I would see a small (impromptu) Zune thread pop up in my joystiq, but I felt compelled to jump in and say that the Zune really is a pretty spectacular media player. While pretty much all the points made so far I agree with I also wanted to add, in terms of Zune vs iPodClassic, I think the Zune has a more forward thinking interface. The iPod has such a dated look and feel for me now.

Also, XNA kicks ass, wireless sync, WiFi marketplace, better sound...etc etc.

Also (not sure if this still applies) zune doesn't convert all your MP3s into some proprietary format before transferring them. Biggest reason We got one instead of ipod.

When my 5th gen iPod bites the dust, I'll be looking at a Zune to replace it.

Chrono you mental spastic the iPod and itunes doesn't do that. They both play AIFF (uncompressed), wav, MP3, AAC without ANY conversion.

Fucking morons.

My wife loves her Zune. I have always used ipods, and yet when she got the Zune I was more impressed with its feel and capabilities. Pretty nice device.

Hey ed - was there a need to get so nasty there? Nobody attacked your mom.

Agreed. I'll take it over the Ipod in every way other than software (not that Itunes is great software, but the Zune's software really leaves something to be desired). They get that fixed up, it's an absolute no brainer.

I recently killed my Sansa MP3 player and got the new Blue Zune. I am pretty impressed with it so far. I have even found other people at the gym I go to using one when I search for people in the social. Although they didn't set their Zune up to show what song they're actually listening to.

I have the iPod Touch and it's my favorite device, but I don't use it for music as much as for videos, photos and mobile web. iPod Touch isn't that great for 1 handed music surfing. Easier to use the Touch with 2 hands IMO.

ZunePass is also friggin awesome!

Ipod and Zune feel totally different to me.

Shopping on ITunes, everything I want is a dollar. Want this? Dollar. Want that? Dollar. How about this? Dollar. Dollar. Dollar. Dollar.

I have a zune pass, which means 95% of what I want I can just download as long as I have the pass. I listen to so much more music that way, things I'd never pay for. Others with niche tastes may disagree, but zune pass gives me 95% of what I want... The other 5% I just skip because there's so much more *other* content that *is* free... If I really want something in that 5%, I can just pay outright for it, just like on itunes.

i really enjoy my zune.. i was lucky i bought mine last holiday from dell.com for $ 99.00 for the 30gb version which was allowed to update to the new firmware.

i enjoy the zune because i use a PC and the zune works better with windows media player and the PC.
Itunes can be a pain and there is so much DRM.. you are stuck using ipod devices with Itunes songs a lot of the time.
IMO zune is better for PC and itunes is better for mac

Nice job MS. Not surprising with the amount of effort they've been putting into the 360 and the quality titles they keep finding for it.

So...for clarification...the Xbox 'division' of MS actually had revenue go DOWN by 22%? The uptick in profit then is either from a: Zune sales, b: cost cutting or c: created naturally through foreign sales of your product during a year in which your US dollar was tanking.

Always nice to see the Sony spindoctor at work.

Did Xbox revenues NOT fall by 22%? That is what the source article says. If their costs didn't fall 22% then the Xbox is losing more per console than previously. Math is awesome.

You misunderstood the article. At least slightly.

It's not Xbox sales that were down. Its sales for the entire Entertainment & devices division which includes the Xbox and Zune. However, profit is up from last year despite overall sales being down. Dunno why. We can speculate all we want, but it'll just be that. Speculation.

I still don't think they have recouped the billion from RROD right offs. They just threw it in one financial quarter so it looks like the console is making money over it's lifetime. In rality, it probably hasn't even broke even yet or it has turned a small profit.

In reality they've been profitable for over a year. Microsoft is a large company and they have already recouped the losses for the RROD. Of course not all from the E&D division.

It doesn't really matter though. fact is theyve been profitable for over a year which is good for them.

johnny- you are wrong sorry.
MS has already made that money back.
they have been pulling a profit since mid 2007. holiday profits were in the billions, which alone covered the 1-2 billion spent and set aside on RROD warranties.

this trend will continue for ms.
and i dont see the ps3 profiting anytime soon,
maybe sony will stick with the outdated ps2...

Congradulations MS. I stand corrected. I thought they were in the red....

They ARE if we are talking about Xbox alone, Xbox revenue is down 22%...since I doubt they slashed costs by 22% I'd say the Xbox is still losing them money.

The Xbox portion of the entertainment division have been turning profit for almost a year now.

They are, by $9billion. However that was in PREVIOUS quaters, so apparently that does not count...

You would have to be a total idiot to think they actually made any REAL money..

The other question, anyone know how many of those 2.2m consoles actually worked?

Did Microsoft just announce this to make Sony feel bad? BASTARDS!

In other news: I saw Kaz on the highway selling bottled water for 20 bucks each.

Impressive with no Halo title in the quarter. As much as MSFT has invested in our entertainment medium, I'm glad to see them raking in some cash.

Its a pretty stark contrast to Sony's problems this year. I hope Sony has some cash socked away from the PSX/PS2 heydays. Could be rough for a while. Especially if consumers don't move on to BlueRay very quickly.

I still like sony better tho........

call it fanboyism......... I call it playstation memories from 1996-2008. original playstation then PS2... then psp and now ps3.

Iam sincerely happy for MS but iam not a fan of FPS's or anything halo. yes i have tried.

Why do you Sony boys still think all xbox has is FPS games?!?

I feel sowwy fo yo motha.

@deaftly:

Top 3 selling games all time:

Xbox
Halo 2
Halo CE
Splinter Cell

Xbox 360
Halo 3
CoD4
GTA IV

Sony PS2
GTA
Gran Turismo Aspec
GTA

Sony PS3
GTA
CoD4
Motorstorm

Maybe because PS3 seems to have something other than shooters in their top 3...or Xbox being American based and we know how the yanks love them guns.

@deaftly
it baffles me as well when one of their most hyped about games are FPS KILLZONE and Resistance (those two games always come up in the list wars) which I'm looking forward too playing :)

@naxe
I owned a PS1 and PS2, now 2 xbox360 (for me and my bro) and soon a 160gb PS3 in the indefinite future but you make it seem like getting a 360 is treachery against Sony, if you look at it most 360 owners were once or is Playstation owners.

I go where the games are.

The logic behind using that list in your arguement is flawed.

The list simply demonstrates the popular genres, of which FPS is pretty popular. Also the top three best selling games is in o way a representation of the rest of the availalbe titles and their different genres as a whole.

The 360 does have an abundance of FPS's I'm not gonna argue with that, and in that respect you are correct. But to imply that there is almost nothing else is simply incorrect.

Kspraydad,

4 of the top 10 best selling xbox 360 games are shooters
5 of the top 10 best selling PS3 games are shooters

Whoops.

I do not want Resistance 2 or Killzone. I dislike Fps. But compare the amount of FPS on 360 to that of the Ps3 and you will see what i mean.

I dont know why but i dont like FPS... Not my cup of beer. bioshock looks amazing but its First person and I dont like that perspective.

I don't get it. The 360 has the most robust game library on the market. From shooters to a TON of jRPGs, sports, music, family, arcade, racers... The 360 probably has more of every type of game than any other next-gen console.

@vcinze

I wasn't using the lists to SUPPORT the view of Xbox as shooter only...I was using the lists to SUPPORT that they are similar and that it is 'attitudes' about yanks in general that create the xbox is only shooters viewpoint.

"we know the yanks love them guns"

Its a big fucking country.... not all of us are gun toting yokels. I have never even fired a real firearm is my life (paintball guns, bb guns, never a real gun). Please don't stereo type me.

@ Kspraydad

Looking at your list, it could be stated that while MS fans love guns, Sony fans just love vehicles

Will that's your opinion on genre,
naxe does NOT = the gaming community or COD4 wouldn't have sold 10 million last time I checked.

As I said before it comes down to what genre you prefer but don't make it sound like the 360 is an FPS machine when only 20%-30% of the games are FPS[NOT SURE BUT I SAW A GRAPH A WHILE BACK] it's just their highly rated due to the controller being well suited for it, Triggers + Comfortable design FTW.

@dirty...

I'm not PERSONALLY stereotyping you...I am giving insight into how the majority of the world perceives yanks...gun toting, offish, rude and self important. This doesn't necessarily reflect YOU, but it certainly is the image your country as a whole has abroad. Isn't the push of Obama one of your country's attempts to fix this image?

http://www.foreignpolicy.com/gallup/

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Microsoft's Xbox division turns Q1 profit, ships 2.2 million consoles

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