With not one, but two lawsuits against Microsoft for scratched discs and the cost of extending warranty, the Entertainment arm of MS is bleeding pretty bad right now. In the last fiscal quater, MS only shipped 700,000 Xbox 360, as compared to 1.8M same time last year.
Of course, that 1.8M was without challenge. Now with both PS3 and Wii on the market, we're now seeing the truth nature of competition. Clearly the Wii is winning the war at the moment, and PS3 is losing.
MS is obviously unlikely to chop off the Entertainment arm, but with a loss of $1.9 billion loss, it's certainly making MS bleed. Meanwhile, MS's overall profit rose 7% to $3 billion in the forth quarter. $1.9 billion? that's small change.
Source: Information Week, Game Industry.biz
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