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Xbox division back in red

Despite console sales being up "almost 30 percent"
Microsoft's Entertainment and Devices Division is back in the red, after reporting it's first two profitable quarters ever last year.

The Xbox division (which is also comprised of Windows Mobile and Zune) fell from a profit of $106 million to a loss of $31 million, for the third quarter ended March 31, 2009.

Despite the drop Xbox 360 was the division's strong performer, with console sales up "almost 30 percent" to 1.7 million units, says MS.

Microsoft as a whole reported overall revenue of $13.65 billion, a six percent decline from the same period last year and the first year-on-year revenue fall in the firm's history.

Expectedly, the company put the hiccup down to the world recession, in an interview with The Guardian.

"We remain more cautious than most about the state of the world economy," said Microsoft's chief financial officer Chris Liddell. "While we'd all like to think the recovery will be soon and painless, we believe it will be slow and gradual."

computerandvideogames.com
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Posted by altitude2k
It's probably because console sales are up that they're in the red. They make a loss on each console - even more so with the Arcade version. The more they shift, the more they lose. Stands to reason.
Posted by Black Mantis
They need to do something grand with the Zune. Hopefully the rumours of the one that can play original Xbox style titles is true and they release it worldwide this time.
Posted by Black Mantis
I thought they make a profit on all the consoles, but not as much as they did due to the price cuts. Although I think they care more about market share than profits at the moment, hence going after the mainstream market.
Posted by altitude2k
General finance model of console companies is to accept loss on hardware, make lots more money on licencing games. That's why a good bind ratio is important.
Posted by lonewolf2002
»

Very true just don't say that about the PS3 though.

Anyway maybe they are in the red because again they have said they will fix their balls up I mean E74 errors for free.
Posted by Rob S London
They need to Launch the Zune over here, I'm sick of not being able to use all of the features of mine cos I'm outside of the US, I can't even download the free games
Posted by khr0nik
I dunno how originals xbox games would work on a zune. Unless they release a new unit.

I've got an 80gb unit myself and the touch pad is quite primitive, barely works with the texas hold 'em and puzzle game that came free with the firmware update.

I remember footage from a presentation ages ago where a rep said XNA games would work, and showed footage of an up-scrolling shooter. We'll have to wait and see.

As a music player its tops and the software is awesome, I f*cking hate itunes.
Posted by altitude2k
They'd have to, I'm sure. A ZuneX or something...
Posted by Mark240473
I dunno how originals xbox games would work on a zune. Unless they release a new unit.

I've got an 80gb unit myself and the touch pad is quite primitive, barely works with the texas hold 'em and puzzle game that came free with the firmware update.

I remember footage from a presentation ages ago where a rep said XNA games would work, and showed footage of an up-scrolling shooter. We'll have to wait and see.

As a music player its tops and the software is awesome, I f*cking hate itunes.[/

I hate anything with an 'i' in it. Particularly ironing.

I bought a Sony MP3 player because it was only £100.00 from PLAY.com. It came with a set of bluetooth headphones which normally retail for £70.00. Bargain. It also works using my USB hub in the car, of which the ipod (a work collegues) didn't. Shite.
Posted by Black Mantis
The rumours are about an entirely new Zune, not the models out already.
Posted by Zonf
A loss in consoles should easily be made up in software sales.

Although the second hand game market may cause problems there.
Posted by lonewolf2002
Again true and seeing as I had to cut back on my expinditure 2nd games are all I can get mostly.
Posted by JimSteele
Makes sense for the Zune brand to branch out into PSP/DS territory. Although every bugger's doing it these days, so fighting another war on 3 fronts might not be a great idea.
Posted by Miss Marvellous
31 million is a drop in the ocean for MS
Posted by The Bossman
I'm not surprised, the amount of cash they've splurged on exclusive DLC. They deserve to be in debt, and so do Sony for having absolutely no business acumen at all.
Posted by The_KFD_Case
MS will probably be far more concerned about any changes in the IT business segment of their profits. Netbooks are cheaper than desktops which has eroded some of the profits MS have been used to making from people buying 1,000 dollar PCs vs. the several 100 dollars netbooks. That, and the recession has taken a big chunk out of corporations being willing to update hardware and software (Vista's rough start hasn't helped, and I personally suspect Windows 7 will have to be the OS that picks up from where XP left off market wise).
Posted by Sirini
Surely selling four netbooks for $1000 is better than one desktop PC, because that's 4 copies of windows, and 4 sets of office sold instead of one.
Posted by The_KFD_Case
One might think so and yet the official market analysis is that a decrease in hardware sales has hurt MS profits. Furthermore, since many of the netbooks are part of an old idea to create a "100 dollar computer" the costs have been kept down by using low grade hardware meaning that the netbooks seem to be predominantly pushing XP or Linux due to their lower resource (which translates directly in to hardware,) requirements.
Posted by Zepf
Not good news for anybody.

Wonder exactly where all that money's going?
Posted by only_777
Nintendo.
Read all 20 commentsPost a Comment
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