Xbox division profit nearly doubles, nearly 34 million 360s sold

[UPDATE] Microsoft's overall Q3 profit declines 18 percent to $3.57 billion, but Entertainment and Devices income jumps from $159 million to $312 million; Xbox Live revenue up 50%, gaming revenue up $100 million.

This morning, software giant Microsoft reported its earnings declined during the quarter ending September 30. On a year-on-year comparison, quarterly revenue sank 14 percent to $12.92 billion, with profits declining 18 percent to $3.57 billion ($0.40 per share), from $4.37 billion ($0.48 per share). The company blamed the decline on the deferred cost of a program that lets new PC buyers upgrade to Windows 7, which officially launched yesterday.

Still in the black in Redmond…for now.

Of particular interest to gamers is the performance of Microsoft's Entertainment and Devices Division, which makes the Xbox 360 and Zune multimedia handheld, and will have 3D games by year's end. Though Microsoft touted "Windows and Xbox exceed expectations due to strong consumer demand" in the subtitle of its earnings release, the division's earnings were down slightly. Revenues fell from $1.893 billion in July-September 2008 to $1.891 billion during the same three months in 2009.

E&D operating profit, however, nearly doubled, going from $159 million to $312 million during the quarter, which saw the launch of the already multiplatinum 360 shooter Halo 3: ODST. The game was the top US title for September, the same month that also saw the $300 Xbox 360 Elite price drop in full effect. (It began at the end of August.)

[UPDATE] In a conference call with analysts after the report, Microsoft investor relations general manager Bill Koefoed dropped more details on game revenue. For the quarter, overall gaming revenue was up nearly $100 million dollars, with Xbox Live revenues increasing 50 percent.

The executive also revealed that the Xbox 360 now has an industry-best 8.7-title attach rate--that is, an average of 8.7 Xbox 360 games sold for each console sold. More significantly, the 360's installed base is now "almost" 34 million units worldwide, up about 3 million from August. By contrast, Nintendo's Wii had an installed base of nearly 53 million at the end of July, and nearly 24 million PlayStation 3s were sold as of late August.

During Microsoft's prior fiscal year, which ended June 30, the E&D division generated an annual operating profit of $169 million, its second consecutive year in the black. As a platform, the Xbox 360--and before it, the Xbox--had traditionally been money losers for Microsoft since it got into the console business in 2001.

Today, though, Microsoft's overall third quarter profits were bigger than the $0.32 per share predicted by a survey of analysts compiled by the Thomson Reuters news service. As a result, the company stock shot up over $2.40 (9 percent) to over $29 per share in premarket trading.

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Discussion

458 comments
FabioPizzini
FabioPizzini

Lol look at the update ... overall Q3 profit declines 18 percent to $3.57 billion ... someone are don't telling the truth here ... LOL

flyingteddy
flyingteddy

i have more than 8.7 games for my ps3, is that abnormal ???

irilthor
irilthor

oh and i have 3 xboxes too but its not because i want to have one while the other is in repair, my dad and brother play xbox 360 too, sometimes a friend comes over with extra xbox and i lend him my monitor and we play 4 player co-op games ;) Left 4 dead weekend was awesome :)

irilthor
irilthor

im with you on that one izmickey, i was in luck to find a gamestore that went out of business so everything was HALF priced, i immediatly bought the wireless network adapter, 3 battery packs + chargers , memory card, 2 extra controllers + steering wheel. If i would have had to buy that at full price.. no way :s

izmickey
izmickey

@ mjnoir1 I hear you man. If my PS3 broke down on me i would def still buy the ps3. FANBOYS need to understand that some people invested heavily (games,accessories) on their system and dont want buy another console to start from scratch. But MS really needs to do something about their accessories because most are too expensive.

izmickey
izmickey

Im glad MS is making money despite its problem with the xbox360. Now i know they'll be back in the next gen console race. Lets face it without either Sony or MS what would we be left with gaming....the wii? We NEED MS and Sony. Long live playstation and xbox.

gamerTag-shank
gamerTag-shank

jace78 Posted Oct 27, 2009 11:37 am PT The reason microsoft has sold so many 360's is becuase everyone I know has to buy atleast 2 or 3 just to have a working gaming machine while the others are in for repairs. Gratz? ---------------- Your theory doesn't match up with the fact that the 360 has the largest attach rate by far of the consoles.

tremor33
tremor33

@ idkwhattoput3 You've got the "Fanboy" part right. Why do people even bother with these types of comments? BTW I have all 3 systems

jace78
jace78

The reason microsoft has sold so many 360's is becuase everyone I know has to buy atleast 2 or 3 just to have a working gaming machine while the others are in for repairs. Gratz?

Amz1217
Amz1217

well all I can say is..........kudos to you MS

shawn_mitchel
shawn_mitchel

I believe what we should do as Gamers is "give Sony and Microsoft ideas and suggestions on what we want in future games",........and not to argue about which Console is best or making most sales as of the present. If Sony and Microsoft knows what we want in future games and actually listen to us,......i think that is what is really important.

AlphaCommando
AlphaCommando

@sleepnsurf If you'd been paying attention to any recent sales figures, you'd notice that the PS3 is 'beating the 360 into submission'. Also, multiplayer platform games should work fine on all systems, you can't say that PS3 plays multi-platform games worse than the 360 purely because you think so. But that's fine if you want to stick to the two or three series' that the 360 has for it. Enjoy Assassin's Creed 2 without the PS3 perks if you're getting it. :)

kavadias1981
kavadias1981

That's pretty good for only 4 years on the market. I won't be adding to that number, as my PS3 provides, but good for you M$.

P0T
P0T

It is of interest to gamers when the games division makes money, regardless of the system! It means more games and more support from them and etc. When a company isn't making money, things go downhill or the console dies off, like the Dreamcast. When they are making a profit, it is good for the gamer as our console has a longer lifespan, more support and more games.

irilthor
irilthor

i myself have an xbox and i must say if the ps3 was cheaper id def. get that, i just returned my xbox to microsoft for repairs, then got a new one that broke immediatly the day after i got it, so i had to send it back for repairs Again.. if the ps3 wasnt so ridiciously high priced id def. buy that. But i dont see why i would pay so much just because it has a blu-ray player in it, the xbox plays blu-ray rips wich is imo even better since i will problably never ever buy or rent a blu-ray movie

wiidsduelpack
wiidsduelpack

Now MS needs to work on durability. My friends who have a 360 admit that the system is very breakable thanks to those red lights. 360 has good games that Sony doesn't even have and definitely better games than the Wii. A little more security would be better for consumers.

glhx2112
glhx2112

RE: Maxxgold. Dude, it's 2009, not 2006. "Normal" Failure rates are probably just about the same now for both xbox360 and the PS3. As for Microsoft being "the laughing stock", get back with me in a hundred years or so when Apple sells a few more PC's. Win7 Smokes anything Apple is even thinking of putting out anytime soon. Sort of negates the entire reason to have an Apple PC, except for the "Look at me, I have a Prius, and Apple, and voted for Obama" - Look. Time to catch up with reality dude.

mpeg3s
mpeg3s

I wonder how XBOX Live will stay on top?

Maxxgold
Maxxgold

What they don't mention is the millions of consoles that were bought and then broke. Ive been to a warehouse with about 10,000 broken 360's from the first generation. They were never fixed and the owners lost out. 34 million to the ps3's 24 million. Probably dead even as far as total units when you take in to consideration all the broken 360's. Gamespot comented that everyone on there staff had a broken xbox. The fact that the PS3 for the first time this month sold more units than the 360 is a trend that will continue. Also no one has hacked the PS3 yet so developers are not loosing money on their games due to Piracy, unlike the 360 where you can mod your xbox and download all the games you want for free.Mom and Dad don't want to waste more money on faulty 360's when they can buy a PS3 that has a normal failure. Microsoft has become the laughing stock of the computer world. Everything they make brakes down or doesn't work correctly out of the box. I.E the new MAC commercial where PC says this time Windows 7 is good to go. LOL yeah right.

idkwhattoput3
idkwhattoput3

Has anyone ever notice that overall, you never see PS3 people comment on 360's articles, but 360 fanboys (including me, not an "avid, i hate PS3 forever fanboy", but "i like the 360 more fanboy") always seem to comment on PS3 articles and just rip it to shreds. And it is fun to get those PS3 guys mad. I guess we are just more aggressive

jakybuddy
jakybuddy

It seems that the 360 owns more of the market with its higher quality online gaming, however PS3 gives you more bang for your buck with its blu-ray player and such. Appears heavy gamers purchase the 360, while multi-media users and such purchase the PS3 due to its greater diversity.

trystkl1826
trystkl1826

I wonder how their sales will do during the holiday season. Which console will see more profit, PS3 or the 360?

WNxUSA
WNxUSA

You'd think with all the money, they could afford to make decent machines and software.

Asuran_Oberoth
Asuran_Oberoth

Nice to hear that MS are still making a profit when Sony aren't, makes me happy I stuck to xbox 360 when I was thinking of switching to PS3. I just wish they would lower the cost of xbox live, the HDDs and release bigger HDDs

Paul_GameFury
Paul_GameFury

@mark_unix How can this device you hate that doesn't exist kick you offline if you say it doesn't have online in the first place.

Zaibach
Zaibach

"HAHAHA! Suckers!!!!"- Ms Ceo

VIRGIN_ISLANDER
VIRGIN_ISLANDER

Hmm with all this money rolling in for them now you think they would at least cut the price of those hard drives, what they are doing with thier accessories is kinda like extortion.

SDBusDriver1979
SDBusDriver1979

For the first three years the system launched Microsoft made a lot of great moves for the system. Achievements, the blade system, wowed people with Gears of War at the time, wowed people with Halo 3's online, a great library of RPGs, a well built controller, securing many exclusives while securing some of Sony's exclusives, and overall I haven't heard anyone complain about developing for the system. Software wise Microsoft made a really compelling system despite its hardware defects with games like Halo which sold 10 million, Gears of War selling 5 million and Forza selling 4 million. Microsoft has put a lot of effort for their buyers, and I am happy to see they are doing well cause of it.

Megavideogamer
Megavideogamer

34 Million Xbox 360's sold in four years is good. The original Xbox sold only 24 Million in four years. Even despite "The Red Ring of Death" issue. For Xbox 3 I hope the MS does not rush it to market. The Natal concept may/or may not catch on. Nintendo has manged to pull that on off howvever. MS should release a Natal stand alone console and a Traditional console for the next generation. Sony failed with the Sixaxis and is trying the wand idea. MS stick with what you are best at your on-line is better than Sony's and Nintendo's.

ZedX-14Pilot
ZedX-14Pilot

Glad to hear at least the gaming division is going strong. Looking forward to picking up Windows 7 at some point as well.

sleepnsurf
sleepnsurf

@Crombian Tiger Woods for wii is awesome. Best golf game I have ever played. The 1 and only reason to own a wii!

Crombian
Crombian

A key advantage for Microsoft is Xbox Live. Hardware gripes notwithstanding, there is no denying this service advantage. I am a multi-platform gamer and XBL is the reason why I keep coming back to my 360. The last game I purchased for Wii was Tiger '10 w/ Wii Motion+ and the only PS3 game I've ever touched is MGS4. As for PC, I grew tired of needing to upgrade my hardware with every game release after Warcraft III so that is how it remains: a platform for SimCity 3000, Starcraft and Warcraft III.

mjnoir1
mjnoir1

look everyone the xbox is doing very well despite it's short commings MS clearly built a device that people want. mine's red ringed MS fixed it and i still keep playing it! If it rrod again i'll most likely buy another one. all the back and fourth insults don't amount to a hill of beans.

BloodMist
BloodMist

And Windows 7 is actually good, unlike Vista!!

ShroudedEagle
ShroudedEagle

@flyingdutchdog For the record, I am no PS3 fanboy. I wouldn't make a good one either, seeing as I don't even own one. I play games on different consoles old and new, for example I love playing Halo 3 and COD4 multiplayer on the 360, I love playing MGS4 on the PS3 when I get the chance, I even want to play Ninja Gaiden Sigma 2 and Uncharted 2 at some point. I enjoy the occasional Wii game, but it's nothing I'd be playing all the time. The point is that I love playing games on all consoles, I just stated that some sales COULD count the owners who didn't go through contacting Microsoft about repairs of their broken console and just simply bought a new one. Let's just face it - the 360 is a good console no doubt, but the break downs are more common than any other next gen console.

slaggo
slaggo

Ugh, it'd be nice if Microsoft didn't nickel & dime everyone for every useful accessory for their consoles...I have a 20gb 360 that's lasted 2 years and still going strong (I'm not a moron who doesn't take care of their electronics). But...I got a PS3 in the beginning of the year and totally love it...expensive, yes (2nd gen 80gb) but it came with everything I wanted: wifi, blu-ray, big hdd, upgradability for hdd, great games, free online service. For all that, I only paid $400. My xbox was $400 at the time for alot less. The value of the PS3 is showing more since the latest NPD sales showed Sony selling MASSIVE amount of consoles. People just want a good deal for their hard earned money..that's all.

gnrlstuart
gnrlstuart

i like thier strategy that they have employed over the last year, last xmas saw the NXE, this year we have last.fm, facebook, twittew and sky, and next year we have natal. the other thing they have clearly thought out are the number of AAA exclusives and the way they are timed, it seems when ideas for exclusives run dry, they pull someting up out of thier sleeve. now im not saying microsoft are perfect, in fact they are kind of greedy in some aspects,( hard disk prices, xbox live subscription,) and they have made collosal failures( rrod for example) but what they have learned from the origina xbox, and the xbox 360, i hope will make a flawless console next generation.

FF_fan2004
FF_fan2004

The PS3 cost too much at the time, and it still does. PS3 now costing £250 here in UK is still too high for me personally. I bought my elite at that price last year, before the consoles dropped further. There were some games that I actually wanted to play, and it happens to be on 360. I wouldn't be too surprised that the 360 did well in sales.

sleepnsurf
sleepnsurf

@AlphaCommando You mean how do they keep beating PS3 into submission? Not everybody likes ps3 exclusives, including me and want a system that plays multi-platform games the best without problems like the 360. Thats why!

TTDog
TTDog

@scarface dm: I don't think they would have stopped at $500 if there had been no competition... and the UK launch price was closer to $800

AlphaCommando
AlphaCommando

How...do they keep selling things? Is it purely for the Halo series?

sleepnsurf
sleepnsurf

Yes I had a console RROD on me a year back and no I did not have to pay for it. We have a 3 year warranty PS3 fanboys. Get your facts straight. Microsoft backed up their faulty harware. Good on ya MS!

mark_unix
mark_unix

@gameweasl it will lack online, it will lack cheap storage options, u will get kicked offline if you don't use anything produced by Microsoft. are you going to buy into that crap?

jmartinez1983
jmartinez1983

"Of particular interest to gamers is the performance of Microsoft's Entertainment and Devices Division" No, this is NOT of particular interest to gamers. All this stuff does it fuel fanboy wars because, for whatever reason, fanboys treat their favorite systems like sports fans treat their favorite teams. Its stupid and Gamespot shouldn't be fueling the fire, but they will.

MTMind2
MTMind2

@highcliff who wrote "Pfff, I can guess why they got so many 360 sales - people having to replace them after they choke and die... I owned a 360...Then it died recently, after two years, red ringing" hmmm, but the 360 is covered for 3 years for the RROD problem is it not? if yours died after just 2 years, why haven't you sent it in for repair under the warranty? and if you did do that, your repaired 360 would not count as another sale, so i'm not sure what you mean really. it reminds me of all those who were trying to put down ps2 sales last gen by claiming the ps2 only had so many sales because of the disk read error (DRE), saying gamers had to buy another ps2, then another, then another, and so on. even if that were true (which it wasn't), sony must have done something right to have gamers willing to buy the same console again, so even if some gamers did buy another 360, MS must be doing something right with the 360. besides, a sale is a sale is a sale, regardless of the circumstances.

gameweasl
gameweasl

Its numbers like this that will lead Microsoft to eventually take a stab at the handheld market. Hopefully they do it right...

ParisSun
ParisSun

Good for them. This doesn't put any money in my pockets though. Just keep the games coming.

tiggerboy
tiggerboy

DAAAAAAAAMN! Thats cash man!