Wait, that link said Microsoft had a Net income of 4.7M, didn't Nintendo have 3 something`? And Nintendo is only games...

That's a great quarter imo. Nintendo might print money, but back down here on earth this is nothing to spit at. Excellent quarter for MS and probably one that makes the accountants happy as well.

Sorry guys... but I think this needs to be brought up in here. Microsoft's Xbox division didn't make money last quarter but most likely came very close to making money. If you look at the following you'll understand what's at play:

Q2 3 months ended Dec 31, 2007
Revenue $16.4 billion
Operating Income $6.5 billion
Net Income $4.7 billion

Entertainment and Devices Division
Q2 Operating Income $357 million

Operating income is your income before taxes and other expenses, Net Income is your profit after taxes and other expenses. As you can see, Microsoft chose to run with the Operating income number for it's Entertainment and Devices Division as it's the more impressive number to use. Sadly they didn't report on Net Income, most likely because it was a loss again for the company.

As far back as I've ever looked Sony and Microsoft only report Operating Income for the games/entertainment divisions(as well as every other division). I'm sure it has to do with the fact that taxes are paid based on total income, not by division so they can't really give a Net Income for any division, only for the whole company. For Nintendo it's possible to get a Net Income for the "games division" because that is all they do.

It's unclear how much the Net Income would be as there are likely some extra expenses, but there's a good chance that it's been positive these last two quarters.

@DarkNight_DS,

Sorry MS reported all segments with just Operating Income they are not trying to hide anything. Would there be taxes on the $357 million? Yes, but the taxes would not be higher than the income. Believe that the Top Federal Tax Rate for Corporations is 35% so taxes would be roughly $357million multiplied by .35. Still a healthy profit.

So what you are trying to say is that a company that loses money doesn't get taxed?

It seems there is light at the end of the tunnel for the XBox. But remember part of this amazing cutting costs was just paper shuffling by writting down a billion dollars for RROD. That shurely would have eliminated profit last quarter and eaten most of this one.

If the achieve profit this quarter with no holiday software sales and no Halo launch, and maybe a price drop, then I will be impressed. But I don't see that happening.

The profit is going ot need to get a hell of a lot bigger this year to make a dent in the debt they piled up because next year is where the costs of the next system start pilling up.

@Darknight_DS- You are totally right on that Operating Income thing. God I can believe I am still bamboozled by company spin. But I think this quarter was at least some amount of positive.

I swear, some of you people are hellbent on your particular crusades for/against certain companies.

Operating income has already discounted all the operating costs - the only other expenses it involves are interests but MS barely pays any of those. I'm not privy to the exact % of taxes MS pays, but the max. is around 30 something %, so let's make it 33% rounding it. The E&D was profitable to the tune of 230 million dollars - much to your dismay, it would appear.

 You aren't seeing 2 billion dollars hidden under the general umbrella of the corp at those two entries, operating income and net income of the corpwide numbers. Those are taxes.

PS: you might notice the difference between operating income and net income for the whole of the corp let's you know MS pays actually less than 33% taxes.

@DarkNight_DS,

Well yes a company that loses money doesnt pay Income taxes. Believe me I owned a company until just a couple of years ago.

But that isnt what I was saying.

If the Entertainment Division was its own separate company the taxes they paid on the $357 Million would not exceed the $357m. I believe that the tax rate for that amount of income is 35% so the tax paid would be ~$123m.

So Net Income would be $357m-$123m=$234m...Not to shabby.