Microsoft of course was quite eager to tout the console's success

[sandywang5230]

In terms of revenue earned,the two fastest growing sectors of the company were the Server and Tools division which saw $3.18 billion of quarterly income,an 18 percent year on year increase and the Home and Entertainment division (which includes their videogame sector),which saw $1.14 billion in revenue,a 94 percent boost in comparison to the $587 million the division earned in 2005.Microsoft Xbox revenue which includes sales of the original Xbox and Xbox 360 increased some $503 million,or 129 percent.One of the biggest reasons that can be attributed to this sharp rise in revenue is of course the Xbox 360,which after being plagued with several months of shortages after its launch,is now in ample supply around the country.Microsoft of course was quite eager to tout the console's success during this time period,announcing that it shipped over 1.8 million Xbox 360 units during the quarter,which brings its international installed base to around 5 million.Microsoft also took the opportunity to once again tout the fact that 60 percent of Xbox 360 owners some three million consumers are connected to Xbox Live,its online gaming service.Unfortunately the increased revenue simply cannot offset the losses that the Home and Entertainment division suffers,as it posted an operating loss of $414 million for the quarter,a 106 percent increase from the previous year.The main reason fifa16coinbuy for these losses is the unfortunate reality that Microsoft d s lose a lot of money on each Xbox 360 that is sold,which the company admits in their financial statement." Home and Entertainment operating loss increased primarily as a result of a $682 million increase in cost of revenue primarily associated with the Xbox 360,partially offset by the revenue growth.Our business model anticipates that while we currently sell Xbox 360 consoles at a negative margin,product cost reductions and the future margins on sales of FIFA games and other products will enable us to achieve a positive margin over the Xbox 360 console lifecycle." On top of the Xbox 360 losses,it seems that the company is still losing money when it comes to the original Xbox console which continues to have negative margins for the company.Microsoft has also stated that a 19 percent increase in employee headcount,partly due to the acquisition of Lionhead Studios,also contributed to the losses for the Home and Entertainment division.For the fiscal year in its entirety,the H E saw $4.266 billion in revenue for the fiscal year,earning $1.56 billion during the October December 2005 quarter when the Xbox 360 launched.However,as with the quarterly earnings,H E's expenditures completely outpaced its revenue.Its operating loss jumped 160 percent from $485 million in FY2005 to $1.262 billion in FY2006.