Allow me to put on my MS fanboy hat for a minute:
The unfortunate thing about this is that we cannot really tell if it's a troubled quarter for the 360 in terms of profit or loss. The entertainment division is alot of things. Unless MS has a breakdown of how the 360 did, we can't really say a whole lot.
However, imo, a decrease in the losses is good, considering you have the Zune to pay for along with other things. IMO, once the 65nm process comes along for the 360 on a typical basis, the 360 should turn the corner for profitability.
Primarily, I expect the 360 to have a bonkers quarter for this holiday between great s/w sales in GTAIV and a MS-made Halo 3.
The real true downside is the fact that MS only shipped 500k units. It proved what we all believed: MS flooded the market. However, they did actually ship units this quarter, showing that atleast a bit of the systems have been sold from December, and are now in need (atleast somewhat) of restocking. MS should be able to move 750k-1m for the next 3 months, or far more if they dropped the price.
To sum it up: No real defining news for or against MS, other than the fact the H&E division, as a whole, is not a good thing for MS. However, considering that loss costs MS 1% of their total cash on hand, its not a hugely bad thing.
IMO, alot of those loses are probably R&D on 360 gadgets, Zune junk and so on. Once MS gets the Zune straight, we should see some profits soon.
Back from the dead, I'm afraid.
