Last year Microsoft Entertainment and Devices Division (EDD)
President Robbie Bach said that the Xbox business would be profitable
in 2008. Well, so far it looks like he's right. Microsoft today posted
its second quarter and first-half earnings for the period ending on
December 31, and for the first six months of the company's fiscal year
the Xbox division has recorded operating income of $524 million
compared to a loss of $423 million during the same period one year ago.
For Q2 in particular, the Xbox division saw operating income of $357
million.
In terms of revenues, sales grew only three percent in Q2 to $3.06
billion, but for the first half sales climbed 25 percent to $4.989
billion. For the first half of the fiscal year, Microsoft shipped 6.1
million Xbox 360 consoles, up from 5.4 million one year earlier. Growth
(and profit) was no doubt driven in large part by the incredible
success of Halo 3.
EDD also houses the PC games and Zune businesses, but Microsoft
attributed the gains primarily to the Xbox 360. "Xbox platform and PC
game revenue increased $1.0 billion or 35% during the six months ended
December 31, 2007, as a result of increased Xbox 360 console sales,
video game sales led by Halo 3, Xbox Live revenues, and Xbox 360 accessory sales," the company said in its 10-Q filing.
Microsoft said that for the remainder of the 2008 fiscal year it fully
expects EDD revenue to continue to increase "due to increased sales of
Xbox 360 consoles and related games, accessories, and services."
Overall, Microsoft's second quarter results were hugely positive. The
company's revenue, operating income and earnings per share came in at
$16.37 billion, $6.48 billion and $0.50 – representing increases of 30
percent, 87 percent and 92 percent, respectively.