Speaking at the company’s annual Financial Analyst Meeting, Microsoft entertainment and devices division president Robbie Bach has claimed that the company’s game division will begin to move into profit in 2008, as economies of scale start to hit home for the Xbox 360.
The division recently reported an increased loss of $414 million
for Home and Entertainment division during its fourth financial quarter of 2006, and according to Bach, the company will again lose money during the fiscal year 2007.
The only time the games division, which has been housed within more than one larger Microsoft internal accounting division, has ever posted a profit is in the immediate aftermath of the release of Halo 2
, when profits hit a promising $84 million.
As reported by
consumer website GameSpot late last week, though, the company expects that the division will begin to turn a profit in the 2008 fiscal year. The only part of the division expected to still be in the red would be the entertainment subdivision associated with the new Project Argo/Zune series of portable media players.
Although Microsoft has never given any specific figures, industry analysts estimate that the company has lost $4 billion on the Xbox project so far, a sum that would have crippled any other almost any other company. With the Xbox 360 proving increasingly popular in the West, and with Bach’s prediction of profits to come, the company’s enormous spend may yet prove to have been worthwhile.