Microsoft’s Xbox Business Finally Becomes Profitable
Five years after its foundation and a little bit over three years after the introduction of the Xbox console, Microsoft Home and Entertainment division announced operating profits, confirming that the console business model can work at Microsoft. The results of the group are explained by great sales of the Halo 2 game as well as rising interest towards Xbox in the USA and Europe.
According to Microsoft, Xbox business revenues were up 20% and profits up 11% in the last quarter of 2004, which was due to introduction of the Halo 2 game – the successor of the most-popular Xbox title. The Home and Entertainment unit posted sales of $1.41 billion and profit of $84 million, both were record for Microsoft. Still, the software giant will need to sustain operating profitability in the coming years, as the company needs to cover its $2 billion Xbox marketing efforts as well as the costs of hardware the company needed to compensate earlier
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