| TRios_Zen said: I'm not saying that your argument is without validity, but the balance sheet you provided a link to shows a total fiscal year gain for the entertainments division...not a loss. Additionally the notes therein identify the performance of the XBOX 360 as a key factor. Additionally, this statement: "No increase in Xbox live games sales..." seems contrary to the market as we know it. Hardware sales are almost ALWAYS sold at a loss as the money is made from sales of software (Nintendo seems to be the exception here). Microsoft's software attach rate is currently estimated as the highest among this generation platforms and XBLA sales add to that. Therefore I'd argue that software sales, including XBLA sales, are exactly what drive profit for the 360 portion of the entertainment division. As far as hardware costs go, I don't think anyone knows, if the 360 is being sold at a loss. Would seem strange to me that with 3 years worth of improvements/cost reductions, that they would be, but you never know.
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I chose the latest quarterly performance as it reveals a more accurate snapshot of the divisions current fiscal performance. It was also a fairly steady quarter with no major releases in any of the divisions product lines, so it gives a good steady state image of the division. And you're absolutely right that software sales would play a massive part in regards to profit for the Xbox business, I tried to isolate the 'xbox live' game sales only, as the OP was trying to make the point that an increase in live sales would be proof of their profitability. Actual retail game sales would bring in the vast majority of their moolah without a doubt.
Anyway, OP was just being controversial. In other news beer is awesome.
