Yeah, it was a loss making quarter for Xbox, but that's to be expected. Given holiday sales Q2 should be a profit-making quarter for Xbox. The big question is whther Q3 and 4 will be profit making quarters for Xbox and what the year as a whole will look like in terms of profiut and loss. Clearly the profit margin for 360 at present is higher than for Xb one and as 360 diminishes and Xb one becomes almost 100% of Xbox's revenue source the ongoing profitability of the Xbox brand is in question. If MS tries to do more things to increase Xb one sales (more free games (esp. free 3rd party games), longer periods of free XBL gold with Xb one purchase) the margins will take a substantial hit and profitability might be hard to come by. As long as Surface keeps up its margins the division itself will look healthy, which might prevent anti-Xbox shareholders from complaining too much.

What do you guys think of Windows phone shipments ? Keep in mind that it's a rapidly expanding market and their best selling phones are priced at or lower than $99/£99. SIM FREE!

Everything else undoubtedly screams great news for MS.

Am I the only one who is amazed by 500 million USD profit with "phone hardware"?

Why do people think that due to a greater increase in the cost of revenue then the platform revenue increased that the Xbox portion of MS business lost money. You cant just that. Lets put it in a way people can understand, You own a lemonade stand and your old flavor which you sell for $1 per glass is now kind of old and people starting to move on. That lemonade costs you 10 cents per glass to make. You still sell 100 glasses in a day. You introduce a new flavor and because of the new not mass produced ingredients you charge $2 per glass for this new lemonade. For now this lemonade costs $1 per glass just to make. So see how your cost of revenue increased, but you still profited.

The moral of the story is you cant determine profitability or loss solely on cost of revenue increasing more then revenue increasing. You need total expenses and total revenue to determine profitability.

From the report
Computing and Gaming Hardware Revenue $2.45 Billion (Surface Revenue was $908 million)
Computing and Gaming Hardware Gross Margin $479 Million (That is a profit)

Game Software is in another Segment
Devices and Consumer Other Revenue $1.809 Billion
Devices and Consumer Gross Margin $312 Million (That is a profit)

Sorry I missed this thread till now.

Can somebody sum up the results?

They shipped 2.4M 360's and X1's. How many does VGchartz show the 360 and X1 selling in that period?

No

The company didn’t disclose non-Lumia handset sales other than to say non-Lumia unit sales “performed in line with the market for feature phones.”

I think this indicates low sales of non-Lumia devices. http://www.idc.com/getdoc.jsp?containerId=prUS25037214

What you mentioned about "making profits on phones being impressive" is true. I didn't expect them to make money given how cheap their best selling phones are. Outshipping SONY phones isn't an achievement and isn't impressive though. 

With that said, Google is hyper aware of the potential growth in the "low end device that perform really well" market. MS biggest competition in the phones business right now is Andriod One and phones like Moto E-G. So much excitement to see how this battle will play out. Fun times ahead!

The third sub-segment, Phone Hardware, generated $2.6 billion in revenue, as Microsoft sold 9.3 million Lumia smarphones and almost 43 million feature phones.

I am subconsciously omitting any piece of information that concerns feature phones lol