They set a billion aside for RRoD in fiscal 2006. It's already on their tab, if you will. You can't count the money twice.

This is true, but it's sort of like a company saying, "we produced 5 million consoles and had a huge loss this year.  But next year we're going to sell them and have a huge profit.  So we were profitable!"

The point is that the profitability is paper-only -- that is, they're literally losing money now, but they're losing money they set aside and listed as a huge loss last year instead of this year.  So while they're losing last year's money now, their product is still losing money, even if it shows to make money on paper. 

OT: Not a big profit, but considering how bad this quarter generally is and that MS slashed the 360 price in Europe, it can't be considered a big loss for them. Overall, not bad, not great. Still in black and that counts for something.

It depends on how much of the billion they've spent... I have no idea whether they're spending more from that than they're currently making.

Again. You can't count the money twice. MS already took the hit on their fiscal year in 2006 for repairs being made today.

It's not a paper-only profit... It's a real profit, just as they took a real loss in 2006. 

Think of the $1B RROD charge for MS like a $1B charge for PS3 Cell/hardware R&D.  They take a one time charge and do not average it out over the life of the console. 

not much......now I think SONY may be in a loss

when will we get the shipping figures of 360??

But Sony isn't doing Cell/hardware R&D for the PS3 anymore, so it wouldn't make sense to amortize that cost, since they didn't have to charge it back anyhow (it cost as they did it). Microsoft is still repairing tons of Xbox 360s all of the time. And they're still selling Xbox 360s that break/rrod.

What they were doing originally made more sense: charge the costs to the quarter that they occured in.  Like spending money on production and hardware, spending money on repairs showed up in the bottom line.  What they've done now, is moved it all to the bottom line from FY07 and hide those costs from the bottom line in FY08.  It's no different than any other company hiding daily costs so they can report profits. 

The reason they charged it back, specifiically, was so they could start reporting profits to placate investors. By the time they go through $1.15 billion, they could have several years or profit reported (perhaps even 1.15 billion of profit or more). This may be a time when they would've been reporting small losses or small profits quarter-to-quarter, especially if they have to drop the price of the 360 in the US to stem Sony's tide.

Great this will be the first year MS E&D division will post a profit.