Xbox 360 Turns a Profit

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Microsoft has got at least one leg up on Sony in the latest round of the console wars: The company’s Xbox division has turned a profit for the first half of the company’s fiscal year.

A report on GameDaily says Microsoft’s second quarter and first half earnings report for the period ending December 31 show the Xbox division posting an operating income of $524 million, the bulk of which appeared in the second quarter, during which the division earned $357 million. The total compares with a loss of $423 million over the same period last year.

The Entertainment and Devices Division of which the Xbox is a part is also responsible for PC games and the company’s Zune media player, but the Xbox 360, driven by the unprecedented success of Halo 3, was given primary credit for the division’s improvement. In its 10-Q filing Microsoft said, “Xbox platform and PC game revenue increased $1.0 billion or 35 percent during the six months ended December 31, 2007, as a result of increased Xbox 360 console sales, videogame sales led by Halo 3, Xbox Live revenues, and Xbox 360 accessory sales.” The filing also said increasing console, game and accessory sales over the remainder of the fiscal year would continue to grow the Entertainment and Devices Division revenues.

At this year’s CES in January, Sony CEO Kaz Hirai said his company would try to achieve profitability with its PlayStation 3 console in the next fiscal year, beginning in April 2008, but a Nikko Citigroup analyst said that while reduced production costs would decrease the losses incurred by the console, profits would not likely be seen until late 2009.

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