Xbox division profits for second straight year, but ...

by JC Fletcher on Jul 24th 2009 9:31AM

Microsoft's Entertainment and Devices Division -- the gaming and Zune portion of the company -- has announced profits for the fiscal year that ended on June 30. Unfortunately for Microsoft, it's 66 percent less profit than last year ($169 million, down from $497 million). In this economy, though, some profit can still seem like a total win.

Revenue from Xbox 360 and PC sales dropped in the fourth quarter by 12 percent, to $110 million, due mostly to reduced Xbox 360 hardware sales and, of course, the fact that the systems cost less and brought in less revenue per console than in 2008. Shipments declined in this period from 1.3 million in 2008 to 1.2 million units. Overall, however, shipments increased from 8.7 million to 11.2 million units. Go figure.

Source

Tags: financial-results, microsoft, microsoft-entertainment-and-devices-division, sales, xbox, Xbox-360

Reader Comments (57)

Microsoft will continue to lose revenue if they don't release any solid games through the course of 2009. We all know that Natal will be coming out soon, along with Halo: ODST and Halo Reach, and of course some XBLA games thrown in for good measure, but will that be enough to earn profit? Yes the 360 is, or will be, favored for such games as Modern Warfare 2, Battlefield 1943, which I'm sure reached the 43 million kills limit already, but multiplatform titles isn't necessarily system sellers, let alone note worthy, if the console in question doesn't have virtually any exclusives in it's line-up. If you don't give the consumer a reason to be on the 360 then you'll see profits drop. And 2-3 games for the course of the year won't do much good.

Your username has a numeral where a letter ought be. Also, it appears you didn't read the title of this post.

yeah ms doesnt release enough exclusives recently. I ended up selling my 360 for a ps3 for games like killzone 2, uncharted 1 and 2, motorstorm, infamous, gran turismo, resistance, and many others. the only games coming out from ms that i am somewhat interested in is the next forza game. everything else will be coming out on ps3 also.

You do know right that MS, Sony, and Wii all make money from all games that are made for their systems, not just their own published titles. This is why traditionally console makers are willing to lose money in the beginning of a console cycle.

For instance, Modern Warfare 2 will sell a ton of copies on 360 (at least 5 million). MS will probably make 50 million dollars+ off of MW2 plus the cut for the map packs plus the extra revenue from everyone continuing their live accounts or signing up to play MW2 online, plus those people who buy new 360s to play that game. Sure, some will go to PS3 for Blu-Ray or Sony exclusives but the gaming pie appears big enough for both of them.

Exclusives don't matter that much if you already have a big enough install base.

Microsoft has the power of advertising to make those multiplats appear to be exclusives. It certainly helps for Madden every year (where the game is shown, then the Jump In logo is shown, with no mention of any other platform)