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Microsoft's Entertainment Division Loses $1.9 Billion

| 20 Jul 2007 16:56
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Microsoft's Entertainment and Devices Division has reported a fiscal year-end loss of nearly $1.9 billion.

The loss includes the $1 billion set aside by Microsoft to address the ongoing hardware issues with the Xbox 360 console. The figure represents an increase of 47 percent over the previous year, and comes despite a 28 percent increase in revenues, for a total of $6.08 billion. According to Microsoft, the revenue jump was a result of increases in hardware, software, TV and mobile device sales.

Unsurprisingly, the bulk of the division's difficulties continue to come from the Xbox 360. Microsoft shipped 700,000 units during the last quarter of the year, a steep decline from the 1.8 million units shipped during the final quarter of the previous year. Sales of Xbox and PC games fell by a combined 28 percent for a total of $256 million. The Entertainment and Devices Division reported revenues of $1.16 billion for the final quarter, a 10 percent drop over the previous year which Microsoft attributed to "decreased Xbox 360 sales."

Overall, Microsoft Corporation reported total revenues for the year of $51.2 billion, a 15 percent increase, and said it was confident its Entertainment and Devices Division would turn a profit this year.

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