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Xbox back in the red

Operating loss for the March quarter.

Dark blue icons of video game controllers on a light blue background
Image credit: Eurogamer

Software giant Microsoft has announced its financial results for the first quarter of 2005, revealing that while the company overall saw solid profit growth, the Xbox division slipped back into the red with a USD 164 million operating loss.

Revenues in the Home and Entertainment Division, which primarily houses the Xbox project, actually grew year on year - rising to USD 583 million from USD 519 million in the same quarter last year.

The operating loss in the division also dropped year on year, falling to USD 164 million from USD 204 million, which could be seen as very positive - but can equally be interpreted in light of the fact that the previous quarter, ended on December 31st, saw the division post its first quarterly profit since the launch of Xbox.

That profit, USD 84 million on revenues of USD 1.27 billion, was largely driven by sales of Halo 2, while the first calendar quarter of 2005 has been much quieter for Microsoft on the software front. The firm will undoubtedly be hoping that the current quarter will be healthier, however, thanks to the launches of Jade Empire and Forza Motorsport.

In terms of Microsoft's overall performance, a little hit from the Xbox division certainly hasn't made any dent in the giant's progress. Overall revenues of USD 9.62 billion were reported for the quarter (up from USD 9.17 billion last year), with a gigantic operating income of USD 3.3 billion (up from USD 1.3 billion).

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