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Xbox Division Posts Loss of $1.9 Billion

Posted by Zonk on from the quite-a-few-boxen dept.

Just when reduced manufacturing costs were beginning to turn Microsoft's Xbox division around, the weight of the warranty guarantee came crashing down on the company. The Xbox division of Microsoft Entertainment posted a loss of $1.89 billion for the fiscal year. Overall the Entertainment division did well, as sales of the Zune, consoles, and Xbox titles helped push revenues higher. Just the same, as Next Generation reports: "The fourth quarter in the EDD was down, with operating losses increasing 183 percent to $1.2 billion, again due to the billion-dollar-plus warranty charge. Revenues dropped 10 percent from a year ago to $1.16 billion due specifically to 'decreased Xbox 360 console sales.' Microsoft shipped 700,000 consoles during the quarter compared to 1.8 million for the same period a year prior."

8 of 150 comments (clear)

  1. Re:New consoles suck by frakfrakfrak · · Score: 3, Funny

    ... Can I buy pot from you?

  2. This is clearly a sign. by typobox43 · · Score: 5, Funny

    Overall, Microsoft announced revenues of $13.37 billion for the quarter and $51.12 billion for the full year, up 13 percent and 15 percent, respectively.
    Microsoft's trying to fit in with the "cool kids" now.
  3. Re:New consoles suck by Anonymous Coward · · Score: 1, Funny

    He clearly states he's using a pipe, so I don't think it's pot that he's working with.

  4. Wait... by TALlama · · Score: 1, Funny

    Overall the Entertainment division did well, as sales of the Zune... helped push revenues higher.

    They sold Zunes? Really?

    --

    - The Amazina Llama

    1. Re:Wait... by ucblockhead · · Score: 3, Funny

      Since Zunes are actually sold at a profit, even selling one "pushes revenues higher".

      --
      The cake is a pie
  5. Re:New consoles suck by LKM · · Score: 4, Funny

    Actually, you can smoke pot with a pipe. Uhm... I mean... at least so I heard.

  6. Re:seems being first isn't what's important by jma05 · · Score: 2, Funny

    Unfortunately, MS seems to be discovering that only now :-).

  7. Re:New Markets by cerussatus · · Score: 2, Funny

    You're completely right, and as such this would be a complete non-story except that this has been going on for six years. At what point does it stop being short-sighted to question repeated 9+ figure (before the decimal) quarterly losses on a product? Could any company other than Microsoft have afforded to maintain "loss leader" status for so long? Could any company have avoided a lawsuit by their competitors over it for this long? The story goes out of the way to make it look like it's the warranty thing that is pushing them into the red, but last I checked $1.1 billion was $700 million dollars less than $1.8 billion... So they would have been eating a $700 million dollar loss even without the warranty thing. That's still a $350 loss per console even after accounting for the "profit" on the high attach rate. wow, replace Microsoft with Bush and replace billion with trillion, and replace million with billion...

    Trust me, it will blow you mind