Xbox division a bright spot on Microsoft's quarterly report
by Christopher Grant 
{ Oct 23rd 2009 at 2:00PM } 
The company reports that "EDD revenue was flat with growth in Xbox 360 platform and PC game revenue offset by decreased revenue from the non-gaming portion of the business" (think: Zune, Windows Mobile). Even with "decreased revenue per console resulting from price reductions during the past 12 months," Xbox 360 platform and PC game revenue increased by 8% "due mainly to increased revenue from Xbox Live and Xbox 360 video games." While the 2.1 million Xbox consoles shipped for the quarter just misses the 2.2 million mark from last year, those reduced production costs help.
With the Xbox sharing top billing with Microsoft's flagship money maker, Windows, on the earnings announcement – both "exceed[ing] expectations due to strong consumer demand" – it seems that Microsoft finally has a consistent hit on its hands. Now, let's talk about accessory pricing ...
Source – Microsoft Reports First-Quarter Results
Source – Xbox Division Doubles Profit in Q1
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Reader Comments (Page 1 of 1)
Captain Planet [Planeteer | Power of Captain Planet] @ Oct 23rd 2009 2:06PM
Well this is certainly good news. After Sony and Nintendo's earnings were off, I was beginning to think Microsoft would be somewhere in the middle. Looks like the Zune HD saved the day.
Duke @ Oct 23rd 2009 2:21PM
"The non-gaming portion of the division (meaning Zune) dragged business down, Microsoft said. "EDD revenue was flat with growth in Xbox 360 platform and PC game revenue offset by decreased revenue from the non-gaming portion of the business."
I don't think the Zune saved the day yet.
"Xbox 360 platform and PC game revenue increased by $96 million or 8% due mainly to increased revenue from Xbox Live and Xbox 360 video games, offset in part by decreased revenue per console resulting from price reductions during the past 12 months"
Yet, there is the great news. it is good to see the gaming division doing well. (Yet I'm guessing that a certain poster here will again say that MS is actually losing money on the 360 due to losses in other years...right? I'm waiting for the comment.)
Silicon Siren @ Oct 23rd 2009 2:39PM
I'd say about 99% of the US population has NO IDEA what the Zune HD is or that it even exists. When they start marketing it for the real Zune HD launch in November we might see significant sales but they really should have pushed the Zune HD in October because the Motorola Droid being as badass as it is will likely replace many sales of the Zune.
R (Planeteers | Power of Penile Pulse) @ Oct 23rd 2009 3:23PM
Seriously. I see Iphone commericals everyday, but I have yet to see one single Zune HD ad on TV or in a magazine.
Dirty @ Oct 23rd 2009 3:24PM
I want a droid and a zune HD. Also good news for gaming! YAY!
johnnynumber5 @ Oct 23rd 2009 4:56PM
I think it just depends how one chooses to define profit and loss. From what I've seen MS has recovered the original losses it wrote off for extended warranty services (nerly 2.0 billion). Much like Kaz Hirai talks about the PS3 being profitable in terms of the platform itself (PSN, peripreals, software etc) MS also now has a profitable platform. In fact, I would say they made the Entertainment Division to mask the losses from the Zune division because the X-Box division is profitable. If you are strictly talking sales of the hardware itself then no they will never be profitable but then again neither would Sony ... not with the R&D and the fact both have sold hardware for a loss since inception. When you talk about the platform as a whole MS & Sony are both profitable.
Stevetrop @ Oct 23rd 2009 2:22PM
Well its good to see the Xbox division pulling in profits and not being considered a gaping would leaking money or blood maybe both.
Now if they can get things together in the next iteration of the Xbox and not have those dastardly RRoD's and cursed e74's they might be able to have a sure fire and very much profitable hit.
Machiavellian @ Oct 23rd 2009 3:12PM
I do not know why SteveTrop post is nuked because he makes a valid point. If it were not for the RROD and e74 problems, MS would have performed much better at this time in the life of the 360. A lot of customer confidence was killed by those problems which put a lot more people on the fence to purchasing a 360.
Stevetrop @ Oct 23rd 2009 3:36PM
Yea I noticed I was downvoted. I'm a Xbox fan and I had each Xbox versions since launch but even as a die hard xbox fan you can see how the RRoD and e74 has tarnished the console. It has cost the Xbox division money to relieve those problems.
If they can find offset those problems for the next console They could be at a good standing point of making profits for it.
AdamJ @ Oct 23rd 2009 4:03PM
RRoD is the main reason I have yet to buy a 360. If the failure rate wasn't so high I'd probably have one already. It's good to see the company isn't losing money though, they do have some fun games, of those i did get to play.
Bobs @ Oct 23rd 2009 4:45PM
Xbox 360 FTW
Now if you excuse me, I'll drive my Saab in circles while waiting for Forza 3 to come out.
Ashfurball @ Oct 24th 2009 3:08PM
but it has come ou-
oh right. soz america!
fuzzynyanko @ Oct 23rd 2009 5:53PM
Ah, it's quarterly report time. How's Sony and Nintendo doing?
Dartmerc @ Oct 23rd 2009 8:29PM
"decreased Xbox 360 platform costs," meaning console REPLACEMENT costs.
AUS_JD @ Oct 25th 2009 12:04AM
So you agree with Microsoft that the 360 is a much more reliable console than ever before and it would be a great time to purchase one?
Dartmerc @ Oct 25th 2009 9:06AM
Of course it's more reliable, you only need to look at the decrease in reports of rrod to see that. Considering the new competitive pricing and some of the deals going around at the moment, now would be an excellent time to make the purchase if you haven't already.
Please all, take off the fanboy goggles - The cost for rrod replacement is in the billions of dollars, and those values are represented in this data.