Microsoft has reported their fourth-quarter fiscal results, and it seems that they aren’t doing so hot, with their overall profits dropping by 29 percent. However, in spite of this, there is one division which has managed to make a profit for its second year in a row.
“In the three months period ended June 30, 2009,” TeamXbox reports, “Microsoft’s Entertainment & Devices Division saw revenues fall 25 percent year-over-year from $1.59 billion to $1.19 billion, but the main reason for that decline wasn’t the Xbox business.”
Revenue from non-gaming businesses, such as Zune and Mediaroom, fell by $291 million or 42 percent, while the company’s Xbox and PC gaming revenue only fell by 12 percent, due primarily to factors such as price reductions in the past 12 months. But thanks to revenue from Xbox LIVE, this decrease was offset.
The Xbox 360 platform and PC game revenue decreased only 3%, primarily as a result of decreased revenue per every system sold because of the price cuts implemented to the Xbox 360 console during the past twelve months. But even if Microsoft made less per every Xbox 360 system sold, increased Xbox Live revenue and higher Xbox 360 system sales helped mitigate the overall decreased revenue.
During fiscal year 2009, Microsoft shipped 11.2 million Xbox 360 consoles compared with 8.7 million Xbox 360 consoles during fiscal year 2008. These last figures explain why the Xbox saw its second straight year of profitability and even if the Entertainment and Devices posted an operating loss of $130 million in the fourth quarter, it ended fiscal year 2009 with an operating income of $169 million.
All in all, I’d say that isn’t bad for a part of their business that at one time seemed to be nothing but a sinkhole for the company’s cash.
