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Microsoft announces $62 billion revenues

Entertainment and Devices division increases profit margin by 529% to $679 million for the year

Microsoft has announced total revenues for its fiscal year ending June 30, 2010 as $62.5 billion - a rise of $4 billion over the previous year, while the software giant's net income stood at $18.7 billion, a rise of $4.2 billion on fiscal 2009.

The Entertainment & Devices saw revenue rise significantly over the last three months of that year to hit $1.6 billion, up from $1.3 billion in the same period of 2009, while the full year revenue rose by just $20 million to $8.058 billion overall.

That segment of the corporation, which includes the Xbox business, resulted in a loss of $172 million for the last quarter, but saw profit over the whole 12 months jump from $108 million is fiscal 2009 to $679 million in fiscal 2010 - a rise of 529 per cent.

The company revealed that it shipped 1.5 million Xbox 360 units between April and June this year, compared with 1.2 million the previous year - but full year numbers were down overall, falling from 11.2 million to 10.3 million.

However, the strong rise in net income was mainly attributed to the decreasing cost of the segment's revenue, which fell by $528 million - in part thanks to "lower Xbox 360 costs", while royalties from third-party content on Xbox Live also increased.

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Latest comments (11)

Thomas Luecking8 years ago
Impressive... I remember some quarters ago they never ever used to make a brofit with Xbox. It shows that it can be profitable to commit to something for the long run. They really challenged the market and succeeded. Can work as a nice business case :)
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Phil Elliott Project Lead, Collective; Head of Community (London), Square Enix8 years ago
Indeed. I suspect among the numbers they won't divulge, however, is the total cost of bringing the Xbox platform to market to-date, and how long at the current rate it will take to effectively break-even...
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.8 years ago
Thomas, while they are generating profit now they still have accrued $6-8 billion in debt since 2001. It will take several profitable generations to break even. At that point, you can write it's business success story. Just to note, they lost another $172 million on the last quarter. After finally moving in the right direction the previous few quarters, they went backwards again.

The big problem with the original Xbox was due to the financial contracts between nVidia and their HDD suppliers. While MS lowered the market price of the Xbox to remain competitive, their components prices did not fall to match the price reduction.

This is also why MS rushed to get the Xbox 360 to market so quickly as it removed them from the confines of the original contracts.
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Show all comments (11)
robert troughton Managing Director, Coconut Lizard8 years ago
Congrats to Microsoft - great to see them doing so well in the current climate.
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Thomas Luecking8 years ago
@Jimmy: You have a good point. I think they will decrease the accumulated debt over the course of time, since they have established a great footprint within less than two product life cycles and they can generate significant operating profits within a full business year. From a business point of view I also remember them saying they want to get access to the living rooms of the people. This was at the very top of Bill Gates Agenda back in 2000. As a business I would just write off the accumulated costs as necessary entry costs plus they have been in a position to subsidize their business from their profitable divisions.

I also remember their dilemma with the costs for the first Xbox... think I red it in "Xbox 360 uncloaked" by Dean Takahashi... very nice book by the way...
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Home and entertainment includes divisions that are less profitable. For instance I think the Xbox biz masks losses on Zune, and cell phone developments like the KIN, that it self lost over 400 million. Anyone correct me if I'm wrong, but the losses they show likely aren't from the Xbox business.
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Well, they did accumulate loss for a number of years, however what price would a company like MS be ready to pay to occupy the lounge space?
Xbox, and this should increase over the next few years, opens new doors for content, products, platforms, infrastructures, and also overall Microsoft brand positioning. Looking at the big picture, I'm not sure looking purely at the Xbox P&L in 10 years will be the best way to judge of the business success to (maybe) come.

Now, of course, that's still a few miles behind something like the iPod, which managed to achieve all these things whilst generating humongus profits ;-)
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Shane Sweeney Academic 8 years ago
Microsoft Games Division
2001 -2 billion
2002 -2 billion
2003 -2 billion
2004 -2 billion
2005 -485 Million
2006 -386 Million
2007 -1.89 Bill (RRoD Year)
2008 1.3 bil
2009 1.6 bil

Promising. :)
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.8 years ago
Shane, I believe you are mixing revenue and operating income together.

Here is the list as I am aware of it starting with 2004 () - indicates loss:
2000 - ($1.1B)
2002 - ($1.7B)
2003 - ($940M)
2004 - ($1.0B)
2005 - ($470M)
2006 - ($1.3B)
2007 - ($2.0B)
2008 - $267M
2009 - $108M
2010 - $679M

So they're moving in a positive direction but are still about 7.5 billion in the hole after clawing back just over $1 billion over the past 3 fiscal years.
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Shane Sweeney Academic 8 years ago
What about 2001?
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.8 years ago
2000 is supposed to be 2001. My mistake.
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