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Microsoft posts deeper loss from XBox

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CIOL Bureau
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LOS ANGELES: Microsoft has nearly doubled its losses from the Xbox video game console in the December quarter, as the unit that makes its Office software closed in on Windows as being the company's most profitable.



In a quarterly report with the U.S. Securities and Exchange Commission, Microsoft has said that it has posted operating income of $1.97 billion in the December-ended quarter in its Windows-centered business unit on revenue of $2.44 billion. That was down from income of $2.11 billion and revenue of $2.68 billion a year earlier.



Microsoft's Home and Entertainment segment, which includes the Xbox, games for personal computers and the company's TV products, posted an operating loss of $348 million in the quarter on revenue of $1.28 billion. A year earlier it had revenue of $833 million and a loss of $180 million.



The company loses money on each Xbox it sells, with some analysts pegging the shortfall at more than $100 per $199 console, meaning that strong sales for the platform actually increase its losses.



Microsoft's Information Worker segment, which includes the Office suite of programs, posted revenue of $2.41 billion, with operating income of $1.88 billion. A year earlier the segment had posted revenue of $2.2 billion and operating income of $1.74 billion.



The only other profitable division in the quarter was Server Platforms, which had operating income of $498 million on revenue of $1.67 billion. That was better than operating income of $402 million and revenue of $1.44 billion a year earlier.



The MSN Internet access segment drew revenue of $569 million with a loss of $157 million, compared with revenue of $462 million and a loss of $211 million a year earlier.



Business Solutions, which includes the company's Great Plains software and the recently-acquired Navision, lost $93 million on revenue of $139 million, compared with a loss of $41 million on $73 million in revenue a year ago.



The smallest segment in the quarter was CE/Mobility, including the Pocket PC operating system. Revenue was $21 million and the unit had an operating loss of $39 million. Both were improved over the year-earlier period when the unit turned in revenue of $17 million and a loss of $61 million.



The company also said it had repurchased 19.4 million shares in the quarter for $999 million, compared to 2.7 million shares for $141 in the year-earlier quarter.



© Reuters

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