Microsoft’s Xbox division loses $31 million in 2nd quarter

For the first time in the history of the company, Microsoft posted a year-over-year quarterly loss in revenue this week, and Gamespot is reporting that some of this loss is due to the Xbox group’s poor performance over the first couple of months this year. The company saw its revenue fall from $14.15 Billion a year ago to $13. 65 Billion, a 6 percent loss.

The Xbox group of Microsoft’s entertainment division is a historically poorly performing group. However, it looked as though the group was turning its reputation around when, in last year’s 2nd quarter, it posted profits of well over $106 Million. This year’s second quarter yielded a $31 Million loss. So much for comebacks.

This dip in sales isn’t particularly surprising. Microsoft’s CFO, Chris Liddell, said he was actually pleased with the company’s relative performance in what he referred to as the “most difficult economic environment” Microsoft had ever encountered.

Liddell’s attitude is, if nothing else, realistic. The gaming industry as a whole has been suffering from an economy about as virile as an 87-year-old coma patient. It’s not fun to lose $30 million, but the juggernaut Wii is going through an “unhealthy sales period“, PS3’s have never sold consistently, and videogames in general took a big hit in March, so we should be careful not to judge the Xbox group’s performance too harshly.

The good news for Bill Gates is that sales of the 360 console are up nearly 30 percent from last year, to 1.7 million units. It seems what Microsoft needs is a better economy and the release of some big name games. Thankfully Wolverine, Prototype, and Batman: Arkham Asylum come out in the early summer. When they make their explosive, violent debuts, we should expect Microsoft’s poor numbers to go up.

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