It was a good quarter for Xbox 360 maker Microsoft. No, it was the company's best ever, pulling in record revenue of $19.02 billion. It highlighted "exceptional demand for Windows 7," wisely downplaying the decrease in the Xbox 360 division.
Microsoft's Entertainment & Devices Division, corporate home to the Xbox business, was responsible for $2.9 billion—down from $3.26 billion the same quarter last year—of that company-wide $19 billion haul. That includes 5.2 million Xbox 360s being snapped up in the three months ending December 31, down 13% from the previous year with a "console mix shift to Elite and special editions" versions of the console. So, fewer Xbox 360s sold compared to last year, but buyers are buying bigger.
The Xbox 360's attach rate of 8.8 games per console sold, typically a big bragging point for Microsoft, had a less enthusiastic footnote. Microsoft noted that "attach revenue declined, given challenging [year-over-year] comparison."
The positives from the Xbox group include 35% growth in Xbox Live memberships, now with 23 million members, and an increase in operating income. While net sales were down, operating income (aka the good stuff) was up, from $130 million in Q2 2009 to $375 million in Q2 2010 for the Entertainment & Devices Division.
Will the release of Project Natal and all those Xbox 360 games that Microsoft is hyping at its X10 event turn things around on the hardware sales side? Gosh, let's hope so! I'm not sure if $19 billion is enough to keep these guys afloat.