Mr. Stickball- Those are excellent points. I agree with them for the most part and think this quarter will be the Xbox division's bggest profit ever. However I am still bearish on early next year for many of the reasons you point to as being positives for this quarter. MS has shown they can spend/invest a ton and system and games sales will probably drop faster than expenditures. When is the next major 1st party title?

@Mr. Stick... see my above post. Do you really think MS will only pull $150-250 for Q2 2008? I'd expect quite a bit more than that personally.

I dont see them making a profit for some time now. The RROD thing is still here, and at very large numbers. I see a lot of people every day that dont have there 360 cause its in the shop. I have talked to about 10 people that have Elite systems in the shop due to RROD. I am in peoples homes everyday as I repair TVS, so I see a lot of problems still. Most of them have a PS3, Wii or both that they are playing, and the Cables for there 360 just sitting there. Its pretty comical the sheer amount of people with 360 issues. I have seen a couple with Wii issues...all of which are loose hands related....and no, a broken screen isnt covered under warranty. But back on topic, I just cant see them turning a profit unless they sell a ton of software.

.... lol

That will have absolutely no effect in the next few quarters, unless the RROD happens with new consoles. They already took the $1 billion hit necessary to fix a lot of consoles, and unless the problem grows, that will likely be enough to account for any RROD-related expenses throughout the 360's lifetime.

They've already reserved the necessary cash to fix consoles that break, and they are no longer taking losses on the sale of each console so I see no reason to think that they won't start being profitable from now on.

Of course this IS microsoft so they could always blow 200M on an ineffective ad campeign.

@dschumm-Good points for the most part, but I don't think it's fair to consider money spent on the next generation, as the OP specified X360, not the division.

 Fair enough, if you eliminate the R&D costs for the next generation that might make them profitable in mid 2008, but I am expecting a serious stall in 360 sales after the holiday much like we saw in 07. The price may be better than the PS3 but it is still not mass market. I think they have an oppurtunity to sell a lot more 360s at the $199 pricepoint but only if it comes well before people start getting enamored with the next system.

Welcome to VGChartz . Time to pick out an avatar.

@kn

I think this quarter will be huge for Microsoft. Somewhere $400 million profit. Software sales in NA have been unreal. I think they might have been better pushing 1 or 2 into next quarter. But I could be wrong and they may have an onslaught ready then too.

To clarify what other people said, Microsoft took a $1.15 billion write off(put money aside) to deal with RRoD problems/warranties. They estimate that will cover 2.5 million repairs, so until 2.5 million xbox 360 fail, there will be no direct RRoD problems hurting profit.

My opinion is that if Xbox 360 was profitable in Q1 08 then they must be profitable over Christmas season. Anyone know if the $150 million in profit last quarter figure I have been hearing about is for Gaming division or all of Microsoft?