Xbox 360 division quarterly revs surge 68 percent

Microsoft's Entertainment and Devices nears $1.57 billion on "robust demand" for console; cumulative hardware sales now top 19 million.

After having the next-gen console race to itself for a year, the Xbox 360 has been in a three-way battle since the PlayStation 3 and Nintendo Wii launched in November 2006. After being roundly outsold by the Wii for most of last year--save for September, when Halo 3 debuted--the console found its sales bested by the PlayStation 3 in January and February. In March, the 360 triumphed over Sony's console by a mere 5,000 units.

However, despite the competition, the Xbox 360 is helping Microsoft turn a profit the size of many country's entire economies. According to an earnings report filed today, the software giant's Entertainment and Devices Division--which includes income from the Xbox 360, Games for Windows, and Zune multimedia handheld--saw its quarterly revenue surge 68 percent.

For the three months ended March 31, the division saw $1.57 billion in revenue, up from $936 million the prior year. However, operating income for the period was just $89 million--an improvement over the $324 million loss the company took the year before, as outcry over widespread 360 hardware failures was reaching a fever pitch.

In a statement, Microsoft called out the division as being one of the crown jewels of its multibillion-dollar empire. "The Entertainment and Devices revenue for the quarter grew 68 percent over the comparable period last year driven by robust demand for Xbox 360 consoles," the company said. "Cumulative console sales surpassed 19 million during the quarter, up 74 percent from a year ago." For the nine months ending March 31, the department took in $6.57 billion, a year-on-year increase of $1.65 billion.

Overall, Microsoft beat analyst expectations, despite a sizable drop in profits. The January-March period saw it earn $4.39 billion on $14.5 billion in revenue, down 11 percent from the same period in 2007. Earnings were hurt by a $1.42 billion fine levied on the company by the European Union and helped by an 18 percent rise in server and tools division revenue.

For the current April-June quarter, Microsoft estimates it will have operating income of $5.8 billion to $6.2 billion on revenues of $15.5 billion to $15.8 billion. For the financial year ending June 30, 2008, the company expects operating income of $26.7 billion to $27.4 billion on $66.9 billion to $68.0 billion in revenue.

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393 comments
Merc1319
Merc1319

i havent had any 360 problems so far, but my friend got the 40GB PS3, an its blu ray drive stopped reading everything a week ago... so sony may have a little bit of a RROD on their hands too

sribz
sribz

i wish i bought gta4 for my 360 instead of buying it for my PS3. it looks a lil sharper on PS3 and less load times while the 360 may have a lil texture pop-up. However, my PS3 required over 3 gb of HDD space, the color saturation and contrast sux, plus I can't play online with PS3 for some reason, and no DLC... so now I may have to get an extra copy for 360, because it's that awesome.

haloboy10
haloboy10

My 360 is sometimes really annoying it freezes more then my old xbox i've the red ring of death twice and i've just restarted my console and it works fine. Strange??????????????????????????????????????????????

Ebaumisnoob
Ebaumisnoob

wierd, seeing as I have gotten the rrod 2 times now, and both times, i just restart my console. No problems afterwards, maybe jesus loves me

darkride66
darkride66

JBDragon said "I'm posting the other side, the side that has a perfectly good working console." And you're by far in the majority, which is great! It's a good system with an excellent games library, but even by conservative estimates you have to figure there are about 3 million or so of us out there that have had or will have rrod (or 6 million if you believe the more frequent 33% number). I would have loved to buy GTA4 on my 360 for the DLC but I don't know if my 360 will last till the end of the week, till the fall when it comes out or maybe this console will be one of the good ones and I'll be fine from here on in. The problem is I won't take that chance anymore, and that frustrates the hell outta me as a gamer. Even if I were to buy a new 360 they're still reporting 10% of those will rrod, and having lived through this 3 times now I wouldn't buy another one, nor recommend one to a friend without strongly cautioning them. The warranty repair system is better now, but I personally wouldn't risk it again.

ne0man
ne0man

I haven't had rrod yet but still...the dvd drive wrecked my brand new virtua fighter 5 on the second day playing it, its ruined, it wont read it and i wasted 70€ on the game for nothing, and ms wont replace my game unless i pay about 25€ extra. thats my only complain so far, though I know for sure i have to expect the infamous ring of death, its certainly not a thing of the past, i underline and understand the frustration of darkride66. i see nothing fanboyish in his comments as most of you seem to imply. but well...let me enjoy gta4 while i still can :D

JBDragon
JBDragon

Zero problems with my 360 that I've had since Dec 26th 2005, so it's 2 1/2 years old and still works great. I see so many complain about the RROD problem and I'm posting the other side, the side that has a perfectly good working console. People will complain all over the place about a problem, but when everything is just fine, most don't say anything. You get a warped perspective of a problem that seems worse then it really is.

Proust
Proust

RROD isn't a issue it's an epidemic. No other product could ship with that many faults and not be recalled. MS has clout like no other. The 360 logo should be a lemon.

darkride66
darkride66

@ thenephariouson. Disk read failures didn't happen this gen, the "error code" looks to be more myth than anything and system lockups are happen on both the 360 and PS3. RROD will stop being talked about when it stops being an issue, and even if newer 360's only die 10% of the time that doesn't matter to the approx 5 million people who have had or will have rrod. It's like a disease, just because you haven't caught it doesn't mean it's not an issue to millions of others.

thenephariouson
thenephariouson

God! give the RROD issue a break! what about Sony's 'Error' code, disk read failures, HDD Read errors and system lock ups!!! You really think that IF $ony experienced an issue as large as the RROD error that they would respond in the way MS has (Repair Scheme, extended Warranty, etc) i think not!!

duke720
duke720

I dont realy care if my 360 ever goes wrong cus I know that MS will fix it, so it doesnt realy bug me. I like the PS3 too but theres realy no games to play. I dont see many cool games on the horizon either, well the only one I would get would probably be MGS4. I have seen MGS4 online and to be honest I am very disapointed it looks like your trying to escape from prison. The guns all sound the same, when someone is getting shot they sound like they are being tortured. Its kinda annoying. I dont think the online part of MGS4 is going to be nowhere near as fun as Halo 3 online. I think where it will shine is in the story mode though. By the way I think the 360 will have a long lifespan, cus it has a ton of games to play for months nonstop, and future exclusives to come. Its really a solid console. It realy shines with Live. The PS3 has a lot of catching up to do. I think the PS2 was very successful thanks to GTA. Now that GTA4 is coming out multipllatform the PS3 is not going to have that help that it had from GTA on the PS2. They need to hurry up with MGS4, and GOW. Even then it still needs to have even more games. I mean the BluRay player is a good deal, but theres still DVDs, and the DVD format still has a few years to go. The Wii is the most successful because it has a unique way of playing games and it appeals to children and adults. I think the PS3 is coo but its not worth all that money for now, I rather buy me clothes and shoes with that money.

darkride66
darkride66

@ Irve. Here's a link to the interview. Of course, the thing with this type of speculation is you know MS will never come clean on the issue so how can we know if it's true or not. The 30% numbers were orginally coming from retailers but they could have just had a bad batch for all we know. EA insiders reported half of their launch consoles rrod'd on them but they were quickly hushed up. Anyway, here's a link to the article. It's an interesting read, especially for those of us who have gone through this multiple times. http://www.8bitjoystick.com/archives/jake_inside_source_reveal_the_truth_about_xbox_360_red_ring_of_death_failures.php

Irve
Irve

Well , some peeps just get lucky over the RROD , I'm interested where the 10% failure rate stat comes from as i've not seen that ... the most pesimistic comments i've seen is that MS "seems" to have cured the problem but it's " too early to confidently say" interestingly i did come accross reports of 360 elites going on the blink and tips on how to identify the newer models the whole design of the 360 was flawed .. someone has cost MS dearly over it. but my point still stands is that there is so little differenc between the games on the PS3 / 360 no one can really legittimately say either is rubbish.

darkride66
darkride66

@ _guenter_26. It's not the same one. They keep replacing them with different consoles because the Manuf date and serial numbers are always different. The last one they sent me was older than the one it replaced (and the helpful MS rep asked me "Do you move your console while playing?" I wanted to respond, yes, I've mastered playing with one hand while I jab at my console with an 8 foot long stick with the other. It's fun!" Those are actually very good recommendations you provided on your blog, but those were never my problems. The problem is, once your 360 goes it's replaced by another unit that's also gone. You get locked into this cycle there's nothing you can do except ride it out, give up or buy a new console. That's why you hear so much about people like myself on their 3rd or 4th units. At this point I've got another 2 1/2 years with the original 3 year warranty and the extra 2 year warranty I bought from MS when the warranty was originally only one year, so I might as well stick with it. What I want is MS to actually replace my unit with a new one so I don't have to worry about this problem anymore, but I doubt they have the stomach to fork over new units to everyone. Who knows, though. Maybe this last refurb they sent me will hang in there.

_guenter_26
_guenter_26

darkride66 Your 360 is fvkced up because i bought mine in 06 an i havent gotten rrod and the only way my discs get scratched if i move my 360. Read my blog(not the GTA4 )it tells you how to prevent over heating.

darkride66
darkride66

@ _guenter_26. But that's what I just said. I'm a 360 fan and I'm more than a little miffed because RROD isn't in the past. It's happening right now to anyone that's bought a 360 in the first two years, IE: Most of us. They didn't get a handle on the problem (if one in 10 still failing is a handle) until the hardware revision they made last summer. You pretending like it's not an issue is just burying your head in the sand because for a great deal of us out there who can't play their 360 consoles longer than two hours because they're afraid another 360 will die an them and thus start the whole sodding process of call MS, stay on the line an hour, have a rep try to convince you there isn't a problem, wait for the coffin, ship the coffin, wait for the 360, call MS and stay on the phone for another hour trying to find out why it's taken a month and no console, get console back, then play refurb console until it happens again. Or, if you're like me you can throw in the extra step of trying to get back your $170 console repair when they extend the warranty while they insist you never paid anything, and didn't even have a console repair in the first place, to be replaced with "Check's in the mail," to then calling back and repeating the same process until months later MS actually pays you back. Then do this twice. Then pay and extra $75 for an extra 2 year warranty 'cause you're sick of all this, then try to get that money back when they extend the warranty to 3 years (you can't, by the way, and good thing too because consoles that scratch the hell outta your disks after an hour of play aren't covered by the normal 3 year warranty). Considering I still love my 360 and play on the damned thing, I think MS owes my dumb-a$$ a 360 medal of valor, or some such thing. But I digress...

_guenter_26
_guenter_26

You PS3 fanboys are sorry, yall keep bring up RROD when it is in the past, just because your system sucks doesnt mean you need to bash ours.

darkride66
darkride66

Irve said "the RROD most certainly IS in the past .. unfortunately so are your 360's ... yours and about 12 million others .. for the 6 mil + and everyone from now on the worry has gone." But retailers are still reporting a 10% return rate on newer 360's. We're still talking one in ten being trapped in the same cycle of refurbed units I'm trapped in. While that's an improvement the RROD problem is hardly "in the past". Millions of us still suffer from it's effects and aftereffects. Will, suffer is a bit strong. Suffer from constant irritation, annoyance and paranoia is probably more accurate.

_guenter_26
_guenter_26

Well the PS3 is sucking compared to the 360.

SonyRulzU
SonyRulzU

Must be all the $'s they're suckin out of all their LIVE clients. lol Suckas

Irve
Irve

You know i didn't realise that there is only $50 between a 360 pro and a PS3 ... that's crazy ... MS really need to address their pricing and sort that out as ! $50 for blu-Ray & Wi-fi built in ! dude ... that's seriously $ up right there ! you know the 360 in the UK is $400 including sales tax .. until they shift the price in the US we are getting a seriously good deal .. in fact considering the package i've just ordered is a pro , 2 wireless controllers and 4 games ( 3 rubbish ones and Forza ) was $400 it's a frickin' steal compared to the PS3 at $600

Irve
Irve

wow you know the 40gb PS3 costs $600 in the uk and the 360 pro $400 ! the arcade is only $300 ... so if delta3074 is in the UK he is right. in a way. i fully agree that Digital downloads are not the future that companies would have you believe .. the physical product is king .. and until they deliver the same product as blu-ray at a fraction of the price people will stick with the real thing. that makes Blu-ray a threat to the 360 ... people have to remember that not everyone is a commited gamer.. if your average Joe sees a games machine and Hi Def movie player all in one for $50 more then surely that is a more tempting offer ... after all for that Joe as long as it has Madden adn the latest rubbish film tie in games he's happy. that sounds snobbish .. darkride66 : the RROD most certainly IS in the past .. unfortunately so are your 360's ... yours and about 12 million others .. for the 6 mil + and everyone from now on the worry has gone.

darkride66
darkride66

delta3074 said "with the console so cheap now you can now buy 2 xbox 360's for the price of a ps3 making it cheaper to replace than a defective ps3." Well, that's just wrong. A 40GB PS3 costs $400. A 360 Pro costs $350, then tack your multiplayer subscription costs for another $50 and they're the same price. A 360 Arcade is $280 (plus $50 a year online), and you can't play online with all titles or take advantage of any DLC without tacking on at least another $120 for the cheapest hardrive MS makes available. Then it's even more expensive in it's first year than a PS3. And thanks for letting me know the RROD problems are finished. That's a great comfort to me as I'm on my 4th console as of last fall, and the replacement unit they sent me was older than the one it replaced. It's nice that the RROD is solidly behind us all so we can just get back to gaming and not worrying our consoles will die after 2 hours of play.

darkride66
darkride66

zekere said "The second thing is that I still like to own physical stuff, not only digital stuff." I'm with you. The only people who have to worry about digital downloads are the good folks at Blockbuster video. People who love their movies aren't going to suddenly switch en masse to downloading their movies for a limited period of time, they want to own their movies. Add to this download limits IP's place on you, and the fact that most have started limiting people's bandwidth to cope with increase traffic and not increasing, and digital movie downloads start looking less attractive. Video on Demand services have already been available for years through cable providers and haven't really caught on, and there is no wait for those. What makes you think suddenly waiting around for digital downloads is going to catch on. It's a nice idea, but there are better alternatives currently available for anyone that has cable or satellite services.

darkride66
darkride66

[This message was deleted at the request of the original poster]

zekere
zekere

Digital Download will be way more expensive than blu-ray, because every internet provider here in Europe charges extra the moment you reach a download limit, which is , at a normal internet cost of $60 here, 30 giga byte . 30 gigabyte is almost a ....bluray disk . So digital download is the future when you have no download limit, but that ain't gona happen anymore here in Europe, so I'll stick with bluray . The second thing is that I still like to own physical stuff, not only digital stuff .

delta3074
delta3074

irve bluray is not a threat cos i think you will find that digital download is the way of the future bluray did not beat hd dvd they were both beaten by normal dvds bluray is just holding on a little bit longer thamks to game sales on the ps3 a dvd can now hold 14 gig and as most games are still under 8 gig dvd9 will be around for a long time yet and as most people have said they were sticking to normal dvds i don't see your point. anyway it's been a rough 2 years for xbox 360 gamers with the RROD but all that appears to be in the past and people like me who stayed loyal to the xbox are now going to reap the benefits more money means better hardware and more microsoft exclusive (which are my favorite) and with the console so cheap now you can now buy 2 xbox 360's for the price of a ps3 making it cheaper to replace than a defective ps3. i can't honestly say that the RROD is gone but at least a repalcement is affordable if it does.

Irve
Irve

darkride66 : sorry that is a reply to quite an old post .. thought i was on the first page !

Irve
Irve

darkride66 : that is such BS ... Sony have forced the Blu-ray drive on PS3 gamers .. honestly how many gamers would have been happier with a PS3 that was $200 cheaper ! but it's in sony's interests to foce the Blu ray drive because a) it's a way to force dominance in the dvd market 2) it increases the life span of the PS3 and the expected profits generated in the future. everything has turned out well for sony re the BLu-ray and that is a threat to future 360 sales.

darkride66
darkride66

_guenter_26 said "Well javiergf is right because the BR drive is slower than the 360's DVD drive and you dont have to use the DLC and most 360 owners have a hard drive." But my point is clearly the speed of the drives isn't an issue. You're right that most 360 have a hard drive. Congratulations. I said exactly that the post before yours. Try to keep up.

Gen-Gawl
Gen-Gawl

@darkride: That's one thing I have to knock MS for. A hard drive should have been standard. Bluray/HDdvd I can live without but a hard drive? I'm not sure what Bill was thinking.

_guenter_26
_guenter_26

darkride66 Well javiergf is right because the BR drive is slower than the 360's DVD drive and you dont have to use the DLC and most 360 owners have a hard drive.

darkride66
darkride66

javiergf said "The PS3 need to install a lot of things on the HD because the BR player is way slower than the normal DVD player of the 360." I've heard this argument before, but it can't be as simple as this. Uncharted is one of the best looking titles going and has no install and negligible loading times in game (no load screens at all, in fact). I always read Sam Houser from Rockstar say it was quite a challenge to develop GTA4 for a system without a harddrive, and Arcade and Core 360 owners will have a worse experience than those who can install on a 360 or PS3 drive. And of course, 20% of 360 owners without harddrives won't even be able to buy the DLC unless they cough up another $120-$200 for a harddrive. Poor bastards. That's almost 4 million 360 users.

javiergf
javiergf

Guys, MS making money on the gaming industry is good for everybody in the long term. Having 3 different platforms that are successfull will always give us, the customers, better choices than only having one. What I like about this generation is that it seems that there is no going to be a clear dominator as we had with the PS2 before. I don't think the comments about loading times and HD installation being made here are fair. The PS3 need to install a lot of things on the HD because the BR player is way slower than the normal DVD player of the 360. Check loading times for the same game on the PS3 and 360 and you will see that nearly on 95% the loading times are higher on the PS3 version. For example: http://youtube.com/watch?v=qa5jg0LgRDI I haven't seen GTAIV yet, I really doubt any of you have seen it, so I am not going to say which version is going to be better. I don't expect a lot of differences. I know for sure that the 360 will have exclusive content to be dowloaded on xbox live and I'd bet that the online play is better as well. Will graphics be slightly better on PS3? Maybe, but that would be a first. Look at multiplatform games done on both consoles http://www.gamespot.com/features/6162742/index.html?tag=result;title;0 and tell of a single game that looked better on the PS3. The only one, up to my knowledge, that was slightly improved was "The elder scrolls IV" and that's because it was released a year later. Cheers

Ozzie234
Ozzie234

The 360 version of GTA4 is also HD installable (but optional), so there goes the loading times argument fanboys. lol.

darkride66
darkride66

@ Gromonov. Just to clarify, it wasn't IGN that said GTA4 looked better on the PS3, it was the president of Rockstar, Sam Houser, that said in an interview that he preferred the look of GTA4 on the PS3. Also, I don't think those console repair numbers are exaggerated. I'm on console 4 myself. The problem is once your console goes it's replaced with a refurb console that's already been returned for being faulty. Replacing faulty consoles with faulty consoles locks us poor bastards into a cycle. I'm afraid to play mine because I just know it's going to go on me again. The last console they sent me was older than the one it replaced. I hope they finally got it right with the last one they sent me but I find I buy almost all my multiconsole titles for my PS3 because I don't trust my 360, even though it's covered for another 6 months or so under the 3 year warranty. If it goes after that, which I'm sure it will, I hate to say it but I don't think I'll bother to replace it. For the handful of exclusives the 360 has coming that interest me I think I'll pass, and as a lifelong gamer that's hard for me to say.

zekere
zekere

Hehe, it's always nice to feed the console wars a little . I'll now take a rest and go play Lost Odyssey and Mass Effect . Must get those achievements...

thenephariouson
thenephariouson

I dont even bother with IGN as i find them one of the most biased sites out there. Theres loads of great games on the horizon for both consoles, some may be better on one, some may be better on the other, personally i couldnt care less as long as i have a great gaming experience and devs give me what i want : )

Gromonov
Gromonov

@ZEKE Surely youve put a decent lineup for the ps3 in 2008, however the 360 also has a pretty solid one : gears 2, banjo kazoi, ninja gaiden 2, halo wars, fable 2, Splinter Cell: Conviction, left for dead, alan wake. The 360 HAD GAMES IN 2007 AND WILL HAVE THEM IN 2008. Now its about time that the ps3 starts having games dont you think? the 360 is going nowhere in 2008, live alone will generate a bigger fan base. about GTA looking better on the ps3, thats what a ign said other websites stated that they both looked identical. Also according to ign (if what they say is to be true), the 360 has more colors and the difference is ever so slight. Its funny when you start mentioning this when the multiplatform games always looked better on the 360 and noone was stating anything. And if youre wondering, yes I do have a ps3 and i love it as hell...but I honestly spend more time on my 360. Ill also be buying gta on the ps3 got it preordered.

zekere
zekere

And for those those who still deny the truth, GTA4 runs better on the PS3, has better graphics, less pop-up and NO LOADING TIMES due to installation !! Nuff said !!!!!

zekere
zekere

Again its funny to see how people who DON'T have a PS3 are telling that the system sucks . Gears not possible on PS3 ? Try UT3 . But lets wait and see how they talk when Haze, MGS4, Resistance2, Little Big Planet, Killzone 2, GT5 and FF13 comes out . X360 had the games in 2007, PS3 has the games in 2008 . I love my 360 but the only games it will get this year are Gears of War 2 and Fable 2 , and maybe, Halo Wars . I'll think GTA4 will be the next step in the current console wars . Lets wait and see what it brings ...

HighlyToxic
HighlyToxic

@ CaptainHerlock I don't think you can say "people just give MS a pass when their console breaks." It's the people's uproar that caused MS to spend over a billion dollars to fix their mistakes and extend their warranty. Yes, it's bad business to have a potentially faulty product, but since MS can't go back in time to correct this, it did the next decent thing: own up to it, pay for repairs, and redesign their product. It's not like they purposefully set out to screw their customers. Having a faulty console is a lose-lose situation--frustration for the gamer, and repair costs for the manufacturer. It's not cheap shipping and fixing these consoles, and guaranteeing this for 3 years. So if a console maker is willing to repair a console 6 times, well, I have to admire their commitment.

R3DN1N3
R3DN1N3

The 360 really is THE console of choice when it comes to choosing between it and the PS3. The Wii is AWSOME hands down but it's unique in the sense that you don't feel like your getting a console with the same games. Great multiplayer with a good game library it's a no brainer. The only beef I have with the 360......besides some annoying racists or foriegners is the hardware reliability. Just seems nobody makes em' like Nintendo and it's very frustrating knowing that a complete hardware crash is possible and real.

Gromonov
Gromonov

Its funny how people start stating over exagerated numbers of xbox360 owned. Ive had 2 xboxes an elite and a pro none had any problems and I love my 360s. Even if you had 6 which I highly doubt, you could have just sent them back to MS, instead of buying a colony of consoles. Its ridiculous, we earned a 3 year waranty why not use it?....I dont want to hear "they have bad CS" youre not asked to marry them.