Microsoft Reports First Time Profits for Xbox 360 Division

Sales are also up

Microsoft is saying that, after the fourth quarter of fiscal 2008 and after computing full year reports, the Microsoft Xbox 360 division, which manages both hardware and software sales for the gaming console, is reporting an operating profit of 426 million dollars for the whole year.

The results indicate that, for the first time in the console's existence, it is registering a yearly profit. The year before, 2007, saw the same division post a net loss of 2 billion dollars. This was mostly due to the fact that Microsoft had, at the time, decided to extend the warranty for the Xbox 360 from one year to three years, mainly because of the continued presence of Red Ring'o'Death issues. The extended warranty option resulted in costs that topped 1.1 billion dollars.

In the fourth quarter, losses were estimated at $188 million, which is a very good result considering the fact that the fourth quarter of 2007 saw losses of $1.2 billion. Yearly shipments of the Xbox 360 went up significantly, with some 8.7 million consoles sold in fiscal 2008, which ends on June 30, 2008. The previous year saw sales of only 6.6 million units.

Kevin Turner, the Chief Operations Officer at the division, stated: "Delivering $60 billion in annual revenue is an outstanding accomplishment and a testament to the powerful combination of great technology solutions and strong execution by our partners and global sales and marketing teams. The outlook for fiscal year 2009 is positive given the breadth of our impressive technology portfolio and the expanding collection of online services we are bringing to market".

The announcement from Microsoft comes just as the NPD numbers for June are due out and are expected to show a considerable increase in PlayStation 3 sales, prompted primarily by the launch of Metal Gear Solid 4.

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