The - but the fact is, the new falcons have much less RROD problems. Most of the "RROD" threads I've seen on various forums seem to have many, many less posts now, despite a massive increase in unit sales.
There were a few reasons as to why the X360 wasn't profitable last year at this time, despite a reported profit on the X360:
#1. Retailer incentives. Microsoft sold the X360 at a huge discount to retailers during last Christmas. Remember the $100 gift cards with a X360 purchase? MS took a hit on that. This year, there is no such thing. Each X360 is going for face-value.
#2. After Christmas, Microsoft had pitiful shipping numbers. With the X360 profitable, did it really matter when MS was barely shipping over 500,000 hardware systems? Even at a $50 profit, that's only $25m in profit. Barely enough to really turn it around.
#3. Lack of first-party software. Aside from Gears of War being published by MS, there has been a major drought of uber-IPs that MS has helmed. Before MS turned a profit we only had 1, 1m first party seller (FM2). The rest were MS published, or 3rd party.
Having said that, MS has litterally none of those things to hamper cash flow. The X360 is selling for a much higher profit, with only a $50 drop. The Xbox 360 is selling through MUCH better, and unless MS does something insane, they aren't stuffing the channel (if anything, they're under-shipping, as I haven't seen a X360 since the beginning of November where I live). Therefore, MS is assured more than 500k units every 3 months to sell at a profit.
Add in the fact that Halo 3 has probably shipped another 3-5m units this quarter (H3 shipped around 3.5m or less for MS's last quarter), other decent first-party IPs like Lost Odyssey and PGR4 no longer being deved, but returning profits....It should be good.
IMO, we should see the X360 profit anywhere from $150-$250m for the H&E Department this quarter. The X360 should ship anywhere from 4-5m hardware units this quarter, but have much less than the 2m units that were still in warehouses when Christmas was over.
Back from the dead, I'm afraid.
