MS claims higher profitability on the 360 but it sounds like they are simply selling fewer units which is why their losses declined. Basic law of business, selling more of something at a loss only worsens your losses. Seeing as profits and revenues fell 20% at the same time both hardware and software sales declined seems to indicate they haven't improved their overall per unit profitability much on the 360.
Yes to everyone pointing out that the Zune and other products are in the division, that is true. However by any rough calculation the Xbox group dominates the division (hardware&peripheral&Live sales alone must be around $500-600 million for the quarter). Total software is near $400 million also so that doesn't leave much room for other products. It is possible that the smaller divisions are pushing the overall profit margin around on the margin but it is unlikely that they are having a big enough influence that they would hide the 360's return to profitability. Until MS releases a more accurate breakdown all we can tell is that the 360 is still not doing well profit-wise (especially since the extended warranty on their shoddy 360 was one of the reasons given for the loss, something that will continue to hit 360 profits). The only question is just how badly it is still doing.
