14 DAY TRIAL // Microsoft has announced that in the last quarter revenue went up by 9% to reach more than 15 billion. The Entertainment and Devices Division was not amongst the well performing elements of the company, as revenue went down over last year, mainly because no releases on the magnitude of Halo 3 came this year. Profits for the division, which also manages the Zune, Games for Windows and Mac application software, went down by 6% to reach 1.81 billion dollars.
Microsoft says that it has shipped 2.2 million Xbox 360 consoles in the first quarter of fiscal 2009, while it only shipped 1.8 million consoles in the same period of 2008. The price of the console was lower though, so no extra profits were derived from hardware sales. The upside is that the price Microsoft has paid to manufacture the consoles also dropped by some 21%.
The Securities and Exchange Comission filing that the company has made predicts that the Entertainment and Devices Division will see profits going up in 2009, as sales increase as a direct result of the September 2008 worldwide price cuts.
Chris Liddell, chief financial officer of Microsoft, said that "We're feeling good about the overall level of inventory," anticipating a big holiday season for the Microsoft console. Although the Nintendo Wii is very likely to be the runaway leader in sales again, the Xbox 360 will probably manage to beat the PlayStation 3 from Sony, a company that recently announced a profit warning for the remainder of the year.
Still Microsoft needs to make sure that the price cut is supported by a clean launch for the new Xbox Live Experience, which is already losing features left and right as it nears its November 19 release date. Microsoft recently said that Primetime, a feature that included game shows on the console, would not make it to launch and would only be presented in spring 2009.