Xbox sales up, losses continue

Impressive US user base

While the rest of Microsoft has posted some juicy profits ($2.69 billion! – Ed), the Home and Entertainment division, which deals with the Xbox, recorded an operating loss of $339 million in the last quarter. Even after a rise in the number of units shifted, the Xbox continues to make staggering losses for the Redmond behemoth.

Microsoft, however, will be buoyed by the consoles increasing market penetration. The installed user base now tops 15 million, with the US able to put over 10.1 million units on the field, versus Europe's 3.9 million and 1.5 million in the Asia-Pacific. Overall sales for the Xbox rose 27% over the same quarter last year, with software sales enjoying an impressive 50% rise on last year. One market analyst puts the Xbox's share of the American market around a respectable 33%. This contrasts with a less impressive 15% share of the global console market.

With their rise in sales failing to bring a corresponding shift into profit Microsoft have surely now put all ideas of making any money on their first generation console into the recycle bin. Attention must surely have shifted to the Xbox 2, which is increasingly likely to witness very few price cuts in its first few years of release if Microsoft want to avoid a repeat of the numbers that their aggressive discounting policy continues to generate.

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