MS Q1 2010 financials: Xbox 360 business generates $165M

Microsoft has released its Q1 financials for 2010, ending March 31 and posted a profit of $165M thanks to increased revenue from Xbox Live and the Entertainment Division, despite a 12 percent decrease in sales of Xbox 360.

Entertainment and Devices division, which is the sector that includes Zune, and Xbox 360, only rose 2 percent YoY to $1.67B in revenue.

That's still mighty rich, though.

Thanks to a decrease in the cost of Xbox 360, console sales accounted for $199 million, along with a decrease in manufacturing costs.  Still, sales for the console dipped 200K during the quarter, which is down 12 percent from 1.7M to 1.5M consoles sold YoY.

Software sales for both PC and Xbox 360 decreased 5 percent to $240M, thanks in part to consoles sales falling to 8.8M from 10M, which MS cutting the price of the console along will offering bundles was attributed to this.

In the end, the Entertainment and Devices Division doubled in profit by 242 percent to $851M compared to $249M during the same quarter last year.

Xbox Live revenue was a main contributing factor, and while sales of the Stimulus Pack last month were boast worthy, it came out on March 30 and MS's quarter ended March 31. Therefore, MS said XBL revenue was due to lower manufacturing costs for Xbox 360, and the company cutting $60M (6 percent) of the fat off of marketing and sales costs.

It was also revealed that Xbox 360 has now moved over 40 million units since its release in 2005, compared to 31.4 million sold last year.

The company ended with $14.5 billion for the quarter overall, which is a 6 percent increase YoY, thanks in part to what it called stellar sales of Windows 7 and currency exchange rates.

Microsoft is very, very, rich. No doubt about it.