There had been a bunch of discussion here regarding the results of the E&D division in Microsoft latest quarterly reports. Members knew that E&D includes not only the 360 and games but also the Zune, the Mac software and Windows Mobile. But how much of the revenue, costs and profits can be attributed to gaming?
Entertainment and Devices Division
Three Months Ended
December 31, Percentage
Change Six Months Ended
December 31, Percentage
Change
(In millions, except percentages)
2008 2007 2008 2007
Revenue
$ 3,183 $ 3,076 3% $ 4,997 $ 5,024 (1)%
Operating income
$ 151 $ 375 (60)% $ 329 $ 560 (41)%
Entertainment and Devices Division (“EDD”) offerings include the Xbox 360 platform (which includes the Microsoft Xbox 360 video game console system, Xbox 360 video games, Xbox Live, and Xbox 360 accessories), the Zune digital music and entertainment platform, PC software games, online games and services, Mediaroom (our Internet protocol television software), the Surface computing platform, mobile and embedded device platforms, and other devices. EDD leads the development efforts for our line of consumer software and hardware products including application software for Apple’s Macintosh computers and Microsoft PC hardware products, and is responsible for all retail sales and marketing for Microsoft Office and the Windows operating systems.
Three months ended December 31, 2008 compared with three months ended December 31, 2007
EDD revenue increased primarily due to increased Xbox 360 platform and PC game revenue and other EDD product revenue, partially offset by decreased Zune platform revenue. Xbox 360 platform and PC game revenue increased $135 million or 6%, primarily as a result of an increase in Xbox 360 console and video game sales, partially offset by decreased revenue per Xbox 360 console due to price reductions during the past 12 months. We shipped 6.0 million Xbox 360 consoles during the second quarter of fiscal year 2009, compared with 4.3 million Xbox 360 consoles during the second quarter of fiscal year 2008. Zune platform revenue decreased $100 million or 54% reflecting a decrease in device sales.
EDD operating income decreased primarily due to increased cost of revenue, research and development expenses, and sales and marketing expenses, partially offset by increased revenue. Cost of revenue increased $139 million or 7%, primarily driven by increased costs associated with the Xbox 360 platform reflecting the increase in console and video game sales. Research and development expenses increased $106 million or 29%, primarily reflecting increased headcount-related expenses associated with the Windows Mobile device platform. Sales and marketing expenses increased $83 million or 19%, primarily reflecting an increase in product advertising and channel marketing.
Six months ended December 31, 2008 compared with six months ended December 31, 2007
EDD revenue decreased primarily due to decreased Xbox 360 platform and PC game revenue, partially offset by increases in other EDD product revenue. Xbox 360 platform and PC game revenue decreased $196 million or 5%, primarily as a result of the $330 million of incremental revenue from the launch of Halo 3 in the first quarter of fiscal year 2008 and decreased revenue per Xbox 360 console as a result of price reductions during the past 12 months. We shipped 8.3 million Xbox 360 consoles during the first half of fiscal year 2009 compared with 6.1 million Xbox 360 consoles during the first half of fiscal year 2008. Other EDD product revenue increased $169 million or 15%, led by increased sales of application software for Apple’s Macintosh computers and mobile and embedded device platforms.
EDD operating income decreased primarily due to increased research and development expenses, partially offset by decreased cost of revenue. Research and development expenses increased $251 million or 37%, primarily reflecting increased headcount-related expenses associated with the Windows Mobile device platform, driven by recent acquisitions. Cost of revenue decreased $112 million or 4%, primarily driven by decreased Xbox 360 manufacturing and warranty costs.
Source:
http://www.sec.gov/Archives/edgar/data/789019/000119312509009386/d10q.htm