Microsoft gaming segment posts full-year profits

Entertainment and Devices division ends up $426 million in the black off of more than $8 billion in sales.


Nintendo's Wii may have finally overcome the Xbox 360's one-year head start last week when its US retail sales surpassed those of Microsoft's latest console, but it wasn't all bad news for the software giant. While the gaming world was focused on the E3 Media & Business Summit, Microsoft released its financial results for the fourth quarter and full fiscal year.

Sales and net profits were up for both the quarter and the full year on a company-wide scale. The Entertainment and Devices division that houses the Xbox 360 line also posted positive results, including its first-ever full-year operating profit.

For the 12 months ended June 30, the Xbox division raked in $426 million in operating profits off more than $8.1 billion in sales. That's up 34 percent from about $6.1 billion in revenues the year before, with an operating loss of nearly $2 billion.

Just in the three months ended June 30, revenues for the division were almost $1.6 billion, up 37 percent from nearly $1.2 billion the previous fourth quarter. Entertainment and Devices also posted an operating loss of $188 million, trimmed considerably from more than $1.2 billion in last year's fourth quarter.

Microsoft attributed the full-year spike to increased Xbox 360 sales, and singled out Halo 3, Xbox Live, and accessory sales as specific revenue drivers. The publisher shipped 8.7 million consoles for the full fiscal year, compared with 6.6 million in the previous 12 months. For the fourth fiscal quarter, it shipped out 1.3 million Xbox 360 systems, up from 700,000 for the comparable time period of 2007.

Microsoft's Entertainment and Devices division includes the Xbox 360, Zune, and Windows-based PC gaming, as well as other products like the Surface touch-screen table and Mediaroom Internet TV service.

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