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2008, 360, 84, financial, fiscal, microsoft, quarter, results, sales, xbox, yearXbox celebrates profitable year as 360 hardware sales rise

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Entertainment and Devices Division sees $426 million profit in the fiscal year ending June 30th as MS sells 8.7m 360s

Microsoft’s Entertainment and Devices Division, which includes its Xbox 360 and Zune operations, has announced its first full year of profitable operations, with the fiscal year ending June 30th ’08 bringing $426 million in profit.

This compares to the $1.9 billion loss the Division suffered in the previous fiscal year.

In this period Microsoft sold 8.7 million Xbox 360 consoles worldwide – an improvement on the 6.6 million sold in the year before.

360 was named as the driving force behind the annual results, with PC and Xbox revenue (which includes sales of 360 and PC games, hardware sales and Xbox Live revenue) increasing 41 per cent to $1.7 billion.

Microsoft added that revenue was decreased by $683 million as a result of the $1.1 billion incurred as a result of its extended warranty scheme created to address the console’s ongoing technical reliability problems in 2007. R&D expenses were also up by $242 million and marketing expenses increased by $93 million.

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Looking at the results for Q4 08 ending June 30th, EDD suffered a loss of $108 million, but again this was a massive improvement on the $1.2 billion loss suffered in the same period the year before. Xbox 360 platform sales for the quarter were up 35 per cent to $234 million.

As for Microsoft as a whole, revenue for the fiscal year hit $60.42 billion, an 18 per cent increase over the year before. Quarterly results saw revenue of $15.84 billion, which also represents an 18 per cent increase.

“Delivering $60 billion in annual revenue is an outstanding accomplishment and a testament to the powerful combination of great technology solutions and strong execution by our partners and global sales and marketing teams,” Microsoft COO Kevin Turner stated. “The outlook for fiscal year 2009 is positive given the breadth of our impressive technology portfolio and the expanding collection of online services we are bringing to market.”

1

“Here we go...”
Posted by: Jimothy - Jul 18, 10:47am

So who's going to be the first to come out with a comment like "how many of those were bought as replacements for their broken 360 with RROD" ?

I can see it already.


2
 

“Vista & Office”
Posted by: byz - Jul 18, 10:55am

One thing these reports always fail to mention is that the Entertainment and Devices Division also sells Vista, Office, generic MS hardware such as mice and keyboards as well as most other Ms products to the end consumer via retial.

The question therefore is how much of this profit was due to sales of these products, and to what extent are they hiding the xbox figures behind this?


3

“Re: Vista & Office”
Posted by: LordVader - Jul 18, 11:11am

Errrr, that would be you, Jimothy


4
 

“Re: Re: Vista & Office”
Posted by: Nintendon't - Jul 18, 11:26am

@byz: eer no. the entertainment division does not include Vista, office or generic hardware devices. It does include 360 & PC Games software and the Zune. Try to stick to facts.


5

“Re: Re: Re: Vista & Office”
Posted by: Jimothy - Jul 18, 11:59am

LordVader,

Although it was me who said it, I just meant, everytime an article comes up like this you get the same response from the same pathetic people. Maybe i should have kept quiet, but hopefully it stops people from saying it.


6
 

“Re: Re: Re: Re: Vista & Office”
Posted by: BrettStocks - Jul 18, 12:24pm

@4 Byz is actually right, however, it only includes consumer retail sales of both. Seeing as how the vast majority of the 180 million Vista licenses sold have been through System Integrators and Builders (the likes of Dell, HP etc), it doesn't contribute much to the division as Vista consumer sales bundled with PCs go through the business division.

The same goes for Office; only a small proportion of Office revenues come from the Entertainment division.

Quoted from Microsoft's Q4 results: "Entertainment and Devices Division (“EDD”) products include the Xbox 360 platform (which includes the Microsoft Xbox video game console system, Xbox 360 video games, Xbox Live, and Xbox 360 accessories), the Zune digital music and entertainment platform, PC software games, online games and services, Mediaroom (our Internet protocol television software), the Surface computing platform, mobile and embedded device platforms, and other devices.

EDD leads the development efforts for our line of consumer software and hardware products including application software for Macintosh computers and Microsoft PC hardware products, and is responsible for all retail sales and marketing for Microsoft Office and the Windows operating systems."

The key point is 'retail sales'. The vast majority of sales for both Vista and Office are through its Licensing and Business divisions meaning that yes, it did contribute to the divisions overall results, but that it was mainly Xbox that did.


7
 

“Re: Re: Re: Re: Re: Vista & Office”
Posted by: Nintendon't - Jul 18, 12:34pm

I stand corrected and apologise. I instantly took him for a fan boy. However, the number of 360s sold and the revenue generated, is written clearly in the report: "Xbox 360 platform sales for the quarter were up 35 per cent to $234 million. "


8
 

“Re: Re: Re: Re: Re: Re: Vista & Office”
Posted by: Smithy - Jul 18, 1:42pm

@ BrettStocks & Byz, what the heck are you 2 cluless guys talking about? Vista and Office have aboslutely NOTHING to do with the Entertainment Divison which sells the XBOX 360. Repeat, NOTHING. Vista and Office are amongst the biggest generators of profits on any productss in any cmpany on the entire planet, accounting for the lion's share of Microsoft's over $4 Billion in net profits last quarter, which is more profits than Nintendo and Sony made combined last quarter. Better check your facts, dude.


9
 

“Re: Re: Re: Re: Re: Re: Re: Vista & Office”
Posted: Jul 18, 1:57pm

@ Nintendon't, Entertainment Division, which is mostly made up of XBOX 360 sales, for the quarter, came to $1,575 million. That's a darn site more than than the $234 you are quoting:
http://www.microsoft.com/msft/earnings/FY08/earn_rel_q4_08.mspx


10
 

“@ Smithy”
Posted by: byz - Jul 18, 1:58pm

Smithy, before you start calling people clueless, do some research.

I know for a fact that E&DD sells all those other products as i actually worked in the division for a number of months.

Whilst a i agree that consumer sales of Office, Vista and Hardware may not be the greatest amount, you may be surprised at what it is, and i'm just trying to highlight that these reports never seem to mention that.


11
 

“Re: @ Smithy”
Posted by: Smithy - Jul 18, 2:24pm

You worked in Microsoft's E& D division for a "number of months" did you now? And while you were there, you saw them selling Vista and Office in the E&D Division as well huh?
Will you excuse me while I luagh? I happen to be a long term Microsoft shareholder. I know for a FACT that Vista and Office are NOT part of the E&D Divsision. Now why don't you check Microsoft's own site(its easy enough to do), and see where divisions actually house Vista and Office? Then you can come back and talk,


12
 

“Re: @ Smithy”
Posted by: Nintendon't - Jul 18, 2:29pm

@9: Direct quote from the report above :

"Looking at the results for Q4 08 ending June 30th, EDD suffered a loss of $108 million, but again this was a massive improvement on the $1.2 billion loss suffered in the same period the year before. Xbox 360 platform sales for the quarter were up 35 per cent to $234 million."

I'm just quoting the article, plain and simple. Don't hate me for it.


13
 

“Re: Re: @ Smithy”
Posted by: Smithy - Jul 18, 2:37pm

@ Nintendon't, No one is hating anybody. Just go to Microsoft's own site and read their earnings report. If you will scroll down the page, it says clearly, that E&D made $1575 milion in revenue for the June quarter:
http://www.microsoft.com/msft/earnings/FY08/earn_rel_q4_08.mspx


14
 

“Re: @ Smithy”
Posted by: byz - Jul 18, 2:51pm

Smithy, when you can come back with evidence outside of the above report proving that these items are not part of E&DD then i will take you seriously.

I did in fact work there for a number of months on a temporary contract, which funnily enough was in marketing for guess what........ Windows and office.

To be honest, if you want to dispute this again then go ahead, but for a long term share holder you obviously dont know that much.

This quote was taken directly from the MS site http://www.microso...bach/

The Entertainment & Devices Division is a global division comprising five main businesses: Interactive Entertainment Business, home to the Xbox and Games for Windows gaming platforms; Mobile Communications Business, which develops and markets Windows Mobile software, services and applications; Media Business, developers of the Zune portable entertainment devices and services; Connected TV Business, which includes Microsoft TV and eHome groups; and the Specialized Devices and Applications Business, which includes PC Hardware, Microsoft Surface, Mac Office, Microsoft Auto, and Windows Embedded software.

As you can see E&DD isnt just Xbox. If the report had said IEB and not E&DD then you would be correct, but in this instance you are not!


15
 

“Re: Re: @ Smithy”
Posted by: Smithy - Jul 18, 3:22pm

@ byz, I read your link. Perhaps you will point out exactly where it says Vista is part of the E&D Division, no?
Read this link to the Microsoft earnings report. It tells you exactly what Divisions, Office, Vista (and other Windows desktop OS versions) are at:
http://www.microso....mspx

MS Office is in the Microsoft Business Division (“MBD”). I quote:
“Microsoft Business Division (“MBD”) offerings consist of the Microsoft Office system and Microsoft Dynamics business solutions”

Vista and other versions of Windows are in the “Client” Division. I quote:
“Client offerings consist of premium edition and standard Windows operating systems. Premium offerings are those that include additional functionality and are sold at a price above our standard versions. Premium offerings include Windows Vista Business, Windows Vista Home Premium, Windows Vista Ultimate, Windows Vista Enterprise, Windows XP Professional, Windows XP Media Center Edition, and Windows XP Tablet PC Edition”


16
 

“Re: Re: Re: @ Smithy”
Posted by: byz - Jul 18, 3:44pm

I will admit that it doesn't state Vista directly, however it does state Office Mac which is in the same family as Office, is it not?

Anyway my first report still proves you wrong, you stated that E&DD only sold Xbox, so how do you explain the products sold by the IEB arm of E&DD?

Further more i'm done arguing this point with you. I know what i did when i worked there, and what products i worked on. If you dont believe me, or can give me concrete proof that i didn't provide marketing for Office and Vista to some of the biggest retailers in the uk, whilst working for E&DD, then go ahead. Until that point you are wrong.


17
 

“Re: Re: Re: Re: @ Smithy”
Posted by: Smithy - Jul 18, 4:11pm

@ byz, what the heck you talking about? Your link does NOT even mention Vista or any version of Windows as being part of the E&D Division. On the other hand, my Microsoft earnings link states categorically that Vista and ALL versions of Windows are part of the CLIENT Division. Did you bother to read my link at all? Don’t try and weasel your way out, dude.
As for Microsoft Office, Microsoft’s earnings statement clearly states that Microsoft Office is part of the “Microsoft Business Division (“MBD”) : Again I quote:
“Microsoft Business Division (“MBD”) offerings consist of the Microsoft Office system and Microsoft Dynamics business solutions”
http://www.microso....mspx

If you claim that you actually worked in the E&D Division, and are still claiming that Vista is part of the E&D Division, that will explain why you don’t work there anymore (if you worked at there at all in the first place , which I doubt very much). You have no idea what you are talking about do you? No version of Windows has EVER been a part of the E%D Division. EVER


18
 

“@ Smithy”
Posted by: byz - Jul 18, 7:15pm

To be honest smithy as i said i cant be a*sed to argue this point with you any more.
Quite frankly i couldn't give a toss if you belive me if i worked there or not. For your information i did, i worked in E&DD on a contract, and left to go to another company as they offered me a substantial pay rise. I know what products i worked on whilst i was in E&DD, and if you dont believe me, then good for you.


19
 

“Re: @ Smithy”
Posted by: Brett Stocks - Jul 21, 9:03am

Smithy... If you bothered to read your own evidence, you'd see under the financial breakdown for EDD, this quote:

"EDD leads the development efforts for our line of consumer software and hardware products including application software for Macintosh computers and Microsoft PC hardware products, and is responsible for all retail sales and marketing for Microsoft Office and the Windows operating systems."

Notice the last part? "...and is responsible for all retail sales and marketing for Microsoft Office and the Windows operating systems."

RETAIL SALES – as in copies sold through retailers. Client as I said before is responsible for sales to the people who make PCs.

Next time, before you start trying to argue with people, check your facts, because the thousands of people who have read this story, will have clicked on the link and seen you for the unobservant, opinionated pillock you evidently are.


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