Xbox posts $224 million operating loss

Microsoft announced its financial results for Q1 2005, showing overall profit for the company but a huge loss to its Xbox division.

The Home and Entertainment Division (which essentially is the Xbox division) saw a US$164 million (NZ$224 million) operating loss on revenues of $583 million — which is still an improvement over last year's $204 million operating loss over revenues of $519 million during the same period last year.

Q4 2004 saw the first quarterly profit for the Xbox, but that was primarily due to the launch of Halo 2, which was highly successful in the United States and Europe; Q1 lacked such blockbuster hits.

Microsoft expects stronger results from this quarter, putting its hopes in the launch of Bioware's Jade Empire and Microsoft Game Studio's Forza Motorsport.

While the games division still suffers, the company as a whole reported an operating income of $3.3 billion from revenues of $9.62 billion — dwarfing the losses incurred by the Xbox.