Microsoft's Xbox division posts first-half profit

Last year Microsoft pledged that its Entertainment & Devices Division would turn a profit for the entire 2008. Well, so far it looks like they are on track. The company yesterday posted its fiscal year’s first-half earnings for the period ending on December 31, revealing that the division recorded solid revenue of $524 million, which is notable considering they had a $423 million loss throughout the same period last year.

Last quarter it reported income of $165 million, so that’s actually too quarters in a row it has managed to make money. Although the Entertainment & Devices Division also houses the PC games and Zune businesses, Microsoft attributed the gains primarily to strong sales of Halo 3, Xbox 360 consoles and video game accessories as well decreased marketing expenses and a substantial drop in Xbox manufacturing cost. All in all, this is a notable change for a division known as a money-loser and the company expects revenue to continue to increase in 2008.