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Microsoft suffers big fat loss

As X360 shortages continue.

Microsoft has posted its revenue results for the second quarter ending December 31st, revealing that its Home and Entertainment division - which manages the Xbox arm of the business - has lost $293 million.

But overall revenues were up 9 per cent to a record $11.84 billion and profits were up 5 per cent too, standing at $3.65 billion, so it's not all bad news. The company did admit that they'd have collected even more gold if Home and Entertainment had done better, though.

Last year the division made a profit of $55 million during the same quarter, and revenues stood at $1.37 billion - a figure which has increased to $1.56 billion this year. Microsoft blamed the drop in profits on continuing supply problems with certain Xbox 360 components, but said that they're working hard on a solution.

Microsoft said that more than 1.5 million Xbox 360s were sold in the run-up to Christmas - that's 900,000 in North America, 500,000 in Europe, the Middle East and Africa, and 100,000 in Japan.

Initially, Microsoft hoped to sell 3 million consoles in the 90 days after launch. But huge demand has led to stock shortages, and so they've lowered the forecast to 2.5 million.

But since the supply problems are being sorted out, Microsoft still reckons that between 4.5 million and 5.5 million Xbox 360s will have been shifted by July.