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Xbox 360 business loses $229 million

"Soft gaming console market" blamed as Microsoft's Entertainment & Devices Division sees sales slide 16 percent despite another quarter of Xbox 360's continued US chart-topping.

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Despite the Xbox 360's streak as the best-selling console in the US for 15 straight months, Microsoft's system isn't turning a profit these days.

It's lonely (and apparently costly) at the top.
It's lonely (and apparently costly) at the top.

The company today released its financial results for the three months ended March 31 and revealed a quarterly operating loss of $229 million for its Entertainment & Devices Division, which includes the Xbox 360 business. The division posted $1.62 billion in sales for the three months, down 16 percent year-over-year. Despite that, Microsoft's gaming group is ahead of the game for the first nine months of its fiscal year (which ends June 30), having garnered $7.8 billion in sales to date, up from $7.4 billion by this point last year.

Microsoft sold 1.4 million Xbox 360s for the quarter, down 48 percent year-over-year. The company attributed the division's shortfall to "a soft gaming console market" before noting its streak atop the NPD hardware sales chart and pointing to its new TV apps for an Xbox Live user base of 40 million people. The industry-tracking NPD Group reported double-digit US retail sales declines for each of the first three months of the year.

As for the rest of the company, Microsoft as a whole brought in $17.4 billion for the quarter, up 6 percent year-over-year. Despite that, the company's net income was down slightly to $5.1 billion for the quarter. For the comparable stretch of 2011, Microsoft posted profits of $5.2 billion.

[CORRECTION]: This story originally listed Microsoft's Entertainment & Devices Division as posting an operating loss of $260 million for the quarter. The actual number was $229 million. GameSpot regrets the error.

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