If you read the 10Q you can see more why the E&D division lost $31million.
Interesting things from the 10Q.
Mac Office sales dropped 63% compared to last year.
Currenct exchange rates cost division $38 million.
R&D costs jumped $66 million primarily because of investment into Windows Mobile (MS SmartPhone)
Cost of Revenue (Cost to make things) increased by $52 million. If all of that was to produce 400,000 additional XBox 360's (difference between last year and this year 360 sales) that comes out to $130 per console.
Clearly the reason for the division to have a loss was products other than the Xbox 360. The main driver for loss is Windows Mobile. Search the internet and you can find multiple analysts talking about reduced Windows Mobile sales as well as additional investments being made into the business to try and regain marketshare lost to the iPhone.
Its libraries that sell systems not a single game.
