Xbox Division Records 2nd Profitable Year in a Row
Microsoft released today its financial results for the fourth quarter and full fiscal year. Even if the Entertainment & Devices Division (which includes the Xbox, Zune, Windows-based PC and online games and services, Mediaroom and the Surface computing platform) saw its revenues down in the fourth quarter, the division recorded its second straight year of profitability and mostly thanks to the Xbox business.
In the three months period ended June 30, 2009, Microsofts 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 wasnt the Xbox business.
Revenue from non-gaming business fell $291 million or 42%, primarily reflecting decreased Mediaroom and Zune revenue.
Meanwhile, Xbox 360 platform and PC game revenue decreased only 12%, primarily as a result of decreased decreased revenue per Xbox 360 console due to price reductions during the past 12 months. This decrease in Xbox 360 hardware revenue was partially offset by increased Xbox Live revenue.
During the quarter, Microsoft shipped 1.2 million Xbox 360 consoles worldwide, compared with 1.3 million Xbox 360 consoles during the fourth quarter of fiscal year 2008.
For the 12 months ended June 30, 2009, Microsofts Entertainment & Devices Division revenue fell $292 million or 12%, primarily because of decreased Zune and PC hardware product revenue.
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.