Xbox 360 division revenue slumps 21 percent

Microsoft's overall earnings rise 65 percent, but sales at its entertainment and devices division drop.

To paraphrase Charles Dickens, it has been the best of times and the worst of times at Microsoft. Overall, the software behemoth claims to be firmly in the black, reporting $4.93 billion in profit for the quarter ending March 31--a 65 percent spike year over year. Revenue rose 32 percent to $14.4 billion, thanks to voracious demand for Windows Vista, which was released in January, and Microsoft's evergreen suite of Office applications.

Unfortunately, while Microsoft's operating system demand was robust, revenue at its entertainment and devices division sagged like a perforated, unheated hot-air balloon during the quarter. The sector, which incorporates the company's Xbox 360, Games for Windows, Microsoft Game Studios, and Zune businesses, saw quarterly revenue slide 21 percent to just $929 million.

Speaking to the Associated Press, Microsoft Chief Financial Officer Chris Liddell said that the entertainment and devices division's shortfall was not unexpected. He also claimed that Microsoft was still set to make its previously announced targets of selling 1 million Zunes during the company's fiscal year. Microsoft also still foresees shipping 12 million Xbox 360s by the end of the aforementioned period, which ends June 30.

For its full fiscal year, Microsoft now expects to rake in between $56.5 billion and $57.5 billion in revenue, with operating income expected to be in the range of $22.0 billion to $22.5 billion. During the quarter ending June 30, the fourth in its fiscal year, Microsoft anticipates some $13.1 billion to $13.4 billion in earnings.

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Discussion

539 comments
stevotatersdeep
stevotatersdeep

i am surprised the frequency with witch they break should insure ms a steady income.

HaloArchAngel
HaloArchAngel

I am a total 360/HALO FAN That said Microsoft better rethink there system mess. Now 3 systems to chose from??? Game company's not wanting to make games that only use a hard drive? This is bad for us the gamer. The WONDERFUL ELITE (Black box, ohhHH) BIG DEAL My Wii is Wi-Fi ready out of the box, I was browsing the internet after 15 minute set up of system. COME ON MICROSOFT AN ELITE SYSTEM SHOULD HAVE WI-FI READY, YOUR MISSING THE BOAT

theKSMM
theKSMM

I wonder if Microsoft projects making a profit in their entertainment division in the foreseeable future. I would think that the revenue from sales of XBOX 360 games would be increasing, but I don't know if it's growing fast enough to offset whatever R&D and marketing costs they have. Still, if that division ever gets completely in the black, it might be lights out for their competition.

bobthebird
bobthebird

maybee if microsoft didnt spend so much effort on their videogame business they would have more resources to make a decent OS that can compete with apple

stefan90
stefan90

If microsoft loose some money they will continue to producing new's XBOX's!!!

wakko19991
wakko19991

how much was the 360 is it in the red or black?

stfolife
stfolife

am i supposed to have sympathy for him??? \

TrumpyTheDog
TrumpyTheDog

"TTDog: I would have thought that more companies would be trying to get games out on the PS3 though. When the PS2 was announced a loads of PS1 games all went to PS2, companies switched development to the newer system, same with some of the Xbox stuff (Kameo for one), N64 games were suddenly switched to the Gamecube to take advantage of the extra power. As such the PS1 became a kids console with loads of pre-teen games coming out, the original Xbox had maybe 5 or 6 titles released on it in the last 6 months, yet companies are still developing for the PS2, maybe the biggest problem for the PS3 will be the sucess of the PS2 as no company wants to switch to a machine with a 3.5million user base when they can continue on the PS2 and a 50million+ user base. If the reason behind the mass of 360 releases is Billy putting his hand in his pockets then its worked and theres a big enough user base for the 360 to make it worth software companies releasing games on it. If Sony removed all PS2 support it might make companies more supportive of the PS3... just a thought." Couldn't have said it better myself.

Alucardmishima
Alucardmishima

TTDog, that's pretty perceptive, I hadn't thought of that. I honestly don't mind them making PS2 games, because I can play them on the PS3 and I honestly don't care about graphics.

ColdfireTrilogy
ColdfireTrilogy

ball of air, thats an empty shell of a comment because of your lack of detail ... heck i dont even own either but wiht a statement that generic i could say this: " Man PS3 is so much better than my 360 ... ive had like 3 problems with it" .... Back to the topic, this means very little as does the slouch in ps3 sales, its a bout the games people ... consoles will sell less and less as more people get them. In the end its the revenue from the games themselves.

rocky2k32000
rocky2k32000

like i still say. ps3 is gonna come round! big time.

ball_of_air
ball_of_air

My 360 currently wins 2-0 over my PS3 for things that have gone wrong with it...

Talk2Frank
Talk2Frank

I agree with dryden555, apart from a few exceptions the quality of the games is not acceptable when you look at the price,. My gf got me a 360 to get me away from the PC. However Gears of war aside it cant pull me away from my beige beast ^^ Saying that il prolly get a PS3 when the price comes down just for NG2

rocky2k32000
rocky2k32000

bleh! i still don't see anything special in the 360, but oh well i still place my bets on a rather favourable year for sony. oh yeah!

Zero_Space
Zero_Space

And the raging system wars debates continue.....

ThaRainmak3r
ThaRainmak3r

"dryden555 " umm, actually yea we do, unless of course u dont like fps's or open world rpgs in the vein of K.O.T.O.R. (which they made by the way). I get what you're saying though, and I agree, but these are two games that we can be sure will at least be good. And to "trenken, " this doesn't mean anything, lest we forget that Sony is going through the same thing despite the recent launch in the U.K., so don't jump the gun just yet, Sony still has some ground to cover.

trenken
trenken

Uh oh, I sense the tide starting to turn in Sony's favore. Are we really all that surprised?

dryden555
dryden555

Well, mass effect and halo 3 arent released yet (nor do we know for a fact they will be any good) so to describe that as a reason to have a 360 right now doesnt wash. Both the ps3 and 360 need better games than what's being offered for 60 bucks a pop.

s_king7
s_king7

TTDog, smoothn00dle Nicely said: We all know all three systems are coming out with GREAT games so whoever keeps on posting them games feels insecure. But for me personlay i know which systems games am going to be buying for.

TTDog
TTDog

I would have thought that more companies would be trying to get games out on the PS3 though. When the PS2 was announced a loads of PS1 games all went to PS2, companies switched development to the newer system, same with some of the Xbox stuff (Kameo for one), N64 games were suddenly switched to the Gamecube to take advantage of the extra power. As such the PS1 became a kids console with loads of pre-teen games coming out, the original Xbox had maybe 5 or 6 titles released on it in the last 6 months, yet companies are still developing for the PS2, maybe the biggest problem for the PS3 will be the sucess of the PS2 as no company wants to switch to a machine with a 3.5million user base when they can continue on the PS2 and a 50million+ user base. If the reason behind the mass of 360 releases is Billy putting his hand in his pockets then its worked and theres a big enough user base for the 360 to make it worth software companies releasing games on it. If Sony removed all PS2 support it might make companies more supportive of the PS3... just a thought. @Smoothnoodle; Well said... bring on the quality titles and everyone will live happily ever after... with the probable exception of the most rabid fanboys who can't see beyond the hype of whichever console they own and hate to see other people playing titles they won't be able to play because of twisted loyalty to one brand of machine.

smoothn00dle
smoothn00dle

I think debate about games is pointless. Now we know both sides' game list. Bring on! The good gamez *v*

TTDog
TTDog

"rocky2k32000: listen TTDog. if you checked what i have been saying all along. i hardly even mentioned mgs 4. as much as i love it, there are many 1st party titles i'm looking foward to and can mention a good number. i don't need to mention FFXIII, MGS4, TEKKN 6.that it my point! " Anyone who feels the need to mention or list a whole list of titles they are looking forward to is always trying to over compensate for something, any list will always include a couple of duffers, a few that get delayed and loads that get over hyped. You may not mention MGS4 but feel the need to mention loads of others. Fanboys always go through a long list to justify their purchase, any true gamer wouldn't need to bother with listing anything on any console as they know they'll get all the decent titles regardless of console. By not mentioning the obvious (and then going so far as to say how much you don't mention it) you just look like an ever bigger fanboy than most people take you for. When people list all the games they buy a PS3 for I just see reasons why I'm waiting to see if the console can offer anything new and so far the answer is no, to take the three you did mention MGS to me is over-rated and bogged down with preachy cutscenes, FF XIII has been confirmed as not a Playstation exclusive and Tekken hasn't really changed the gameplay mechanics since number 3. This isn't fanboy stuff either I get the same feelings when Xbox bods mention all the stuff on the 360.. I couldn't give a monkeys for Halo 3 or DOA5, I want something that takes a game formula and adds to it, Deus Ex changed FPS's for the better and Bioshock looks a nice continuation of that, ICO changed the platform explorer idea and I'm looking forward to what they do next, come Friday I'll pick up Raw Danger as the first game was awesome. I don't want to play through cartoon worlds of Jax and Daxter or Ratchet & Clank, I don't want to wade through 1000's of screens killing generic enemies I want something different, and that means I have to stick to new or niche markets. Something the PS3 so far fails to cater for.

rocky2k32000
rocky2k32000

listen TTDog. if you checked what i have been saying all along. i hardly even mentioned mgs 4. as much as i love it, there are many 1st party titles i'm looking foward to and can mention a good number. i don't need to mention FFXIII, MGS4, TEKKN 6.that it my point!

TTDog
TTDog

[This message was deleted at the request of a moderator or administrator]

TTDog
TTDog

Never said the 360 was selling well in Japan, but neither is the PS3. Having seen the UK launch sales of PS3 drop 82% in week 2 they dropped again in week 3 to the point were the best selling game sold under 7,000 copies. Its got a hell of a lot of catching up to do and if its going to start catching up the lead 360 built up during its head start its going to have to match the 360 sales now before it can start clawing back the difference.

rocky2k32000
rocky2k32000

sm00th noodz. why don't you check now? and @ shadow_ dude if you have the *bleep!* to check what i said earlier. you would know i still say awwwwwwww. so HALO and MASS EFFECT will be the all in all this year? that is all 360 fanboys ever talk about. so shadow is HALO god? or it's the killer game of the year! LOL

smoothn00dle
smoothn00dle

@TTDog PS3 not selling too well. Last time I checked Japan sale was Xbox360 sold three thousand units per week compare to PS3 sold twelve thousand. In Japan Xbox360 has less than half millions install base. I would has said PS3 is doing OK.

Shado_Man
Shado_Man

rocky2k32000 aww playforpride. i'm talking about a traditional turn based japanese rpg. besides oblivion is on all platforms and i'm enjoying the sweet polished up version on the ps3. and @darkdragon mage, what you're saying is not a fact. besides check other sites. WORD! cell chips just got cheaper. so it won't take that long for a price drop. besides that does'nt even matter. ps3 has already hit the 1 million mark in less thank 2 months in europe. it's obviously gonna a top rated christmas gift, and this september..........hmm....this september. that's all i can say......aww for 360. Um, what? Why "Aww" for 360? Ever hear of a couple games called Mass Effect or Halo 3? Oh wait, I forgot I'm talking to a fanboy and MGS4 is gonna be God. Nevermind.

dryden555
dryden555

more genuinely good games for the 360 please and then I'll happily buy one. Charging 60 bucks for a nothing special games is also not going to entice customers. I suspect MS already knows all of this and the price of the 360 will come down in novermber.

TTDog
TTDog

The PS3 isn't exactly selling that well in Asia either and it fell flat on its face in the UK once the Chavs and fanboys bought it in the first two weeks, whilst the 360 may be slowing down in Europe its still outselling the "brand new" PS3 by a considerable margin, the PS3 displays in my local stores are only noticable by the lack of people around them, everyone just walks straight past to get to the DS/360 shelves. If they lowered the price they might stand a chance but even if MGS4 were released tomorrow there are plenty of people who still wouldn't buy a PS3 just for 1 game. It may well catch up in a couple of years but its still losing ground on console sales and software. And if you think that the PS3 is the only console that'll sell over the holiday periods you're reinforcing the fact that as a Sony fanboy you don't know squit about the Wii or 360.

matneee
matneee

I can't help but feel that if all the fanboys were to stop screaming at eachother and think for a minute, it would be fairly clear that this was always going to happen as the market gained new competitors.

rocky2k32000
rocky2k32000

@darkdragonmage.............i see.........what yoyu're saying is only likely to happen, but it won't. you just wait and see for yourself. there is no doubt that 360 is dead in asia, as it was even struggling to live. and believe it or not. it is slowly dying in europe and 0Z. more 360s are being returned so far compared to even the ps3 over here. and the ps3 consoles are selling. summer and christmas are coming. that's why i said let's wait and see. place your bet darkdragonmage!....and @ playforpride372....you said it yourself, ps3 is the worst right now.......hmm it's been barely 3 months after its full scale release...from what i'm seeing, it's only getting better and better. place your bet! this is exciting. and i think i'll be smiling at how right i am later this year.

HaloArchAngel
HaloArchAngel

Whoever was in charge of the PS3 launch, must now be in charge of The 360 Elite launch! XBOX - BILL GATES what a mess this is. I had intended to purchase a an Elite 360 in addition to the one I own, but now that I know moving my profile around is such a disastor I will not anymore. Now i know why my Oblivion content no longer works right if not on line! MICROSOFT STOCK HOLDERS CAN WHO EVER WAS IN CHARGE OF THIS SET UP, YOU WILL SELL LESS 360 TO LOYAL CUSTOMERS

darkdragonmage9
darkdragonmage9

rocky what i say is fact you can't expect people to buy something they don't have the money for they are not going to repeat the ps2 number it's never going to happen at $600 and when they drop the price it's still going to more then likly cost to much for most people the ps3 is a quality systeme yes but so was the neo geo and the sega saturn and the dreamcast quality does not mean it's going to do better in sells

playforpride372
playforpride372

Rocky ya, in traditional rpg, your right about xbox 360 having none. i ain't a fan of one of another because i have a ps3, xbox 360, and a Wii. I like them all, but honestly, the ps3 is the worst right now.

rocky2k32000
rocky2k32000

aww playforpride. i'm talking about a traditional turn based japanese rpg. besides oblivion is on all platforms and i'm enjoying the sweet polished up version on the ps3. and @darkdragon mage, what you're saying is not a fact. besides check other sites. WORD! cell chips just got cheaper. so it won't take that long for a price drop. besides that does'nt even matter. ps3 has already hit the 1 million mark in less thank 2 months in europe. it's obviously gonna a top rated christmas gift, and this september..........hmm....this september. that's all i can say......aww for 360.

playforpride372
playforpride372

rocky What are you talking about?!?! Oblivion is an amazing RPG game!!!

jakndaxter7223
jakndaxter7223

ha.................well, i guess M$ is slowing down, everyone owns a 360. People keep saying the Elite will bring them back to glory, but it really isn't that amazing. Bigger and Blacker. People who already own a 360 will hopefully not buy an Elite, if they do, then they need a frontal labotomy.

darkdragonmage9
darkdragonmage9

s_king7 that's the hole point you shouldn't have to wait for the price to drop here in a year or 2 befor you start geting systems in homes the simple reason all the games that were going to be exclusive to the ps3 have become multiplatform is because there isn't the user base to get your money back let alone make a profit selling games for it you can't price a product out of the range of the masses and expect to out sell something affordable it will never happen it doesn't matter how good the ps3 is it will never sell enough to be on top because for one it cost to much and for two the 360 has a year headstart

rocky2k32000
rocky2k32000

can we all LOL at m$ now? hahaha i am laughing! elite is just a joke.

TTDog
TTDog

Personally I can wait as long as it takes.

s_king7
s_king7

soon you'll be telling me to give you what i am on, and i didn't say the PS3 is going to double the XBOX sales this autumn i dont know when it's going to do that i would need to be God to know that but i would guess, it will happen after a price drop. Call me a fanboy if you want to but if ou were to read more of my posts you would know what i am as i said at the end its an OPINION but it is going to happen and to prove that TTDog, shinmew, darkdragonmage9 and anyone else who don't i'll just remind you about this when those sales reports come out. that may be this year next year, 2009 i don't know but i won't forget to post you 3 especially and i'll give you some of what am on lol

TTDog
TTDog

"shinmew: lol, I think s_king7 in on something" The fanboy express to Blinkersville, asks that everyone give the PS3 time to mature that people ought to think about the future whilst putting the boot in to other consoles that already have the very things he's waiting for.

shinmew
shinmew

lol, I think s_king7 in on something. Many times this happens with video game companies. Just because they have a slump does not mean it will stay that way. You have to look at it from both angles. This little slump is nothing when you look at Sonys problems right now. Do you even know how much Sonys stock dropped after the PS3 came out?

darkdragonmage9
darkdragonmage9

i don't see the ps3 ever doubling the sells of the xbox 360 due to the price tag there isn't enough ppl who can afford a ps3 let alone enough people who can that are willing to blow that much on a ps3 face it sony fanboys with that price tag the ps3 will never have enough systemes in homes to beat the wii or the 360

TTDog
TTDog

Surely for the PS3 to start doubling the 360's sales figures it would have to catch up first. So far the only autumn releases for PS3 are speculative, whereas Mass Effect, Bioshock etc have been confirmed. At least the 360 has had some momentum, the PS3 seems to have fallen flat on its face pretty much everywhere.

s_king7
s_king7

This is the begining, We've been telling XBOX owners that the XBOX will start failing this is the begining it will do good in the Autumn but not as good as the PS3. the XBOX is a good system but its not keeping the momentum like it should be You will soon be getting reports how the PS3 is doubling the sales of the XBOX because the future don't look to bright for the Elite as you can see in the other article. Anyways if you don't like this comment its OK its what we call the OPINION.

ball_of_air
ball_of_air

Never mind M$, sales will soon pick up with your Elite.