Thats assuming that the 360 cost $200 this quarter last year, funny how MS fanboys complain when Sony fanboys use the 'PS3 is twice the price of the 360' line but then use $200 as the average price when it suits them.

On topic, I don't think any sane person would say MS is in trouble, that makes even less sense than saying Sony 15 t3h d0m3z, when they make their first full year loss in 14 years. But it does counter slightly the argument that MS could slash prices when Sony cuts the PS3 price to compete. They might manage a small cut, but unless MS wants to never see 360 being profitable (as in, profitable over total system life) then their ability to match the price cut will be minimal.

Some of the posting on this thread are some of the most ignorant I've seen to-date on this site...it's just breathtaking how uninformed some people are...amazing!

No kidding.  People need to learn to do some basic research before commenting and claiming doom and gloom.  If anything, it looks like the Xbox360 and Live service profitted in the range of $600 Million USD for the quarter and quite possibly over $1.5 Billion for all of FY'09 for MSFT.

Researching further into MS Earning statements and listening to the conference call, one would have discovered that the Xbox360 and related products are actually doing quite well and that the loss in E&D and primarily be attributed to Headcount increases in the Windows Mobile Device Platform group.

In addition, Microsoft calls out decreased costs of revenue (hence progress toward profit or increase in profit on the platform) associated with Xbox360.

http://www.microsoft.com/msft/earnings/FY09/earn_rel_q4_09.mspx

"Research and development expenses increased $252 million or 16%, primarily reflecting increased headcount-related expenses associated with the Windows Mobile device platform, driven by recent acquisitions. Cost of revenue decreased $326 million or 7%, primarily due to decreased Xbox 360 platform costs."

If Microsoft hadn't ramped up WinMo development efforts, E&D would have seen a profit of roughly $122 Million. Given that they also call out Zune and PC hardware having massive decrease in revenue, those likely cost the E&D division additional profit potential. When they do call out Xbox revenue decrease, they point out the price drop and also mention that Xbox Live revenue increases offset most of the 360 price drop revenue decreases for the quarter. They do not make any related assertion for Zune of PC Hardware out of E&D

"Revenue from our non-gaming business decreased $292 million or 12%, primarily reflecting decreased Zune and PC hardware product revenue."

While Microsoft did layoff approximately 5,000 employees in the past 6 months, very few came out of E&D, thus while revenue has decreased, operating expenses have not dropped nearly as much. In the case of WinMo, they increased drastically.

All in all, what this means is that Xbox is doing fabulous. One could argue based on the data provided, that without Zune, WinMo, and PC Hardware wrapped into E&D with Xbox, that you could have seen profits from Xbox360 upwards of a $600 Million profit for just Q4 FY'09.

Your quotes are for the full 12 months of the fiscal year, not just Q4FY2009. Also your math is completely off, you can't just add some of those numbers together to get a 600 million profit for Xbox 360.

*facepalm.
MS Entertainment is making:
Natal,
Zune HD,
additional xbox live stuff(zune conectivity etc.),
10-15 xbox 360 retail games,
zune hd games,
probably very early stages of xbox portable project,
and they only released Ninja Blade in Q4,

it's obvious they didn't make profit.

The EDD lost 68 million last quarter, so it is down 198 million so far this year.  I am sure the amateur financial analysts on this site will find the silver lining somewhere in that number.  I am not necessarily interested in reading that spin.  EDD has no impact on MS stock price, in fact analysts rarely mention it.  Microsoft is about the Server and Client divisions, everything else is a distraction.

I do find it interesting that Microsoft shipped 100k fewer consoles this quarter compared to the same quarter in 2008.  The reporting quarter in 2008 was pre-pricecut.  Does this suggest that the effects of Microsoft's pricecut are waning, or did they just stuff the channels in 2008?

You really should think about what I was saying.  I based the $20M on only $200 for two reasons.

1. The revenue is based on price sold to retailers not sold to consumers.

2. The higher the wholesale price the better for the argument.  If the average wholesale price was $250 then the 100K consoles would be $25M.   Higher number is better because it means that more of the reduction in revenue is simply because of fewer consoles sold.

First off MS Fiscal Year ended with this report.   EDD division was profitable for the year.

As for the amateur financial analysts.  There are two groups. The ones that actually think about the numbers and realize EDD is not just the 360.  Then there are the others that simply see a loss in the EDD division and claim it must be because of the 360 and when the EDD division is profitable in a qtr it must be everything but the 360.

Im just doing a few calculations to see what pops up.

EDD revenue fiscal year 2009:

• Total: 7,750M
• Non gaming: 2,141M
• Gaming: 5,609M

(Total non gaming revenue fell 293 or 12% which is how I worked out the ratio)

EDD expenditure fiscal year 2009

• Total: 7,584M
• R+D: 1,827M (likely non Xbox 360 related for the majority)
• Cost of Revenue: 4,331M
• Other, unable to specify: 1,696M

Im not sure what exactly would count as 'other'. Advertising? Xbox 360 game development studios? Aquisitions? Internal payments to other parts of Microsoft?

 This is just a copy and paste, pretty much ignore the 2nd part if you hate uncertainty but the revenue split is pretty obvious. Anyone have any ideas how to better cut apart the expenditure or explain what they are spending money on there?