Microsoft's gaming division has a history of red ink. For fiscal year 2005, it posted a loss of $485 million. For fiscal year 2006 (which ended June 30, 2006, and included the launch of the Xbox 360), it lost $1.26 billion.
However, Microsoft entertainment and devices division president Robbie Bach today said that's about to change. In a presentation at the company's Financial Analyst Meeting 2006, Bach said the gaming division is expected to lose the company money once again for fiscal 2007, but that it will turn in a profit for 2008. If that happens, it would be the first time the gaming part of Microsoft's entertainment and devices division posts a profit for a fiscal year.
The only part of the division (which also includes productivity and mobile operations) Bach expects to lose money in fiscal year 2008 is the entertainment program, which will still be sustaining costs associated with the launch of its Zune media player. Bach said that part of the business will be negative, "but not dramatically so."