MS shifts 10.3m Xbox 360s in FY2010

Microsoft shipped 10.3 million Xbox 360 consoles during its fiscal year 2010, compared with 11.2 million Xbox 360 consoles during fiscal year 2009.

The total number of Xbox 360 consoles shipped is now 41.7 million.

The Xbox 360 platform, which includes the console itself, 360 games, Xbox Live and Xbox 360 accessories, as well as Zune, PC games, and online games and services, all form part of what's called the Entertainment and Devices Division of Microsoft, or EDD.

In total, EDD generated just over $8 billion in FY2010, which is almost exactly what it generated in 2009.

Profits wise, though, the division saw a huge year-over-year improvement, from $108 million to $679 million.

But money made from Xbox 360 and PC games decreased in 2010. Revenues from the Xbox 360 platform and PC game sales were "flat", Microsoft said last night during its financial call.

Xbox 360 platform and PC game revenue decreased $12 million, in fact. Microsoft blamed it on a reduction in Xbox 360 consoles sold and revenue per console. The figure was offset, however, by increased Xbox Live revenue.

Microsoft will be hoping, then, that the recently announced Xbox 360 250GB and 4GB models will pick things up. And then there's always motion sensing add-on Kinect, due out in November.

In the fourth quarter Xbox 360 platform and PC game revenue increased $228 million or 30 per cent, "primarily reflecting increased Xbox 360 consoles sold and increased Xbox Live revenue, partially offset by decreased revenue per console," Microsoft said.

It shipped 1.5 million Xbox 360 consoles during the fourth quarter, compared with 1.2 million during the same period last year. Xbox 360 console units were up 26 per cent and "growing faster than the overall market".

Xbox Live continues to be a tremendous asset, Microsoft said, with over 25 million members. Interestingly, annual Xbox Live digital marketplace revenue exceeded subscription revenue.

EDD revenue for the fourth quarter included a favourable foreign currency exchange impact of $52 million. Lucky Microsoft.

It's not all clinking champagne glasses, however. In the fourth quarter EDD operating loss increased 22 per cent year-over-year to $172 million. Sales, however, jumped 27 per cent to $1.6 billion. Charges resulting from the discontinuation of the KIN phone hit hard – cost of revenue increased $251 million, or 38 per cent. Royalty costs resulting from increased Xbox Live digital marketplace third-party content sales didn't help either. Neither did sales and marketing expenses, which increased $73 million, or 29 per cent. Cirque du Soleil, anyone?

Research and development expenses increased $48 million, or 10 per cent, "primarily reflecting increased third-party development and programming costs and increased headcount-related expenses". Looking ahead, Microsoft said it expects EDD revenue growth in the "mid teens".