The soaring profits were a result of a record third-quarter revenue haul of $14.5 billion for Microsoft, with the E&D division accounting for $1.67 billion of that total. CFO Peter Klein cited Xbox Live as one of the factors responsible for the company's growth. In fact, Xbox Live, and the reduced cost of Xbox 360 manufacturing, helped the E&D division profit despite console shipments falling year-over-year, from 1.7 million shipments in Q3 of fiscal 2009 to 1.5 million in 2010. Tacking on to the last reported figures, Xbox 360 shipments have now surpassed 40 million units worldwide.
With so many Xbox 360 units in the wild, Microsoft's Q3 Form 10-Q document [.docx] brings up a very good point: "Our hardware products such as the Xbox 360 console are highly complex and can have defects in design, manufacture, or associated software." You don't say.