Microsoft's 1q 08 Results, Profitability!

[rocketpig]

albionus said:
Since MS conveniently moved this years cost of repairing and fixing 360's to last year it's possible the game division will be profitable. If MS hadn't done that it is likely they would have lost money this quarter as well despite Halo 3 (though it would have been a relatively small loss). Unless MS earns around $1 billion this year it means it still doesn't have a structurally profitable gaming division. Given that, it's a bit too early to celebrate.

That $1b RRoD expenditure was moved back to the previous year for tax reasons and to try to get the 360 into the black this fiscal year. It was also the entire expected cost of the RRoD problem, not just this year. MS won't be eating $1b a year to fix the 360s (though they may go over that $1b number down the road and have to dump more into the problem). If MS sold 10m 360s a year, $1b would cover a complete replacement of 1/3rd of those consoles. That's just not realistic. It costs MS far less to repair and refurb a console than it does to build everyone a brand new unit, meaning that $1b number will last them far longer than one year.