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Xbox loses $1.9 billion, failures at fault

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Microsoft has unveiled its financial numbers for its fiscal year 2007 (which ended June 30), and the Xbox division has posted a loss of $1.9 billion dollars. Just to give a bigger sense of impact, that's 1,900,000,000. $1.2 billion of Microsoft's loss occurred in the fourth quarter and is mainly attributable to the recent warranty extension (which includes retroactive repair refunds). Microsoft claims that the loss was offset to a certain extent by declining manufacturing costs. Keeping this cost declination in mind -- and that the warranty costs to Microsoft seem to be covered now -- GameDaily reports that fiscal 2008 could be the year that Xbox finally sees a profit, as Robbie Bach predicted earlier this year. A killer lineup of games this holiday -- lead by Halo 3 -- combined with a possible price drop, could very well push Xbox into the black for the first time.

As for the rest of the numbers, Microsoft shipped 6.6 million Xbox 360s in fiscal 2007, ramping their installed base up to 11.6 million (just short of the goal of 12 million set by MS). PC and Xbox game sales increased by %19 percent, up to $650 million.

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