Microsoft Game Division Posts Reduced Losses. Oh, and Reduced Revenues.

Microsoft announced yesterday that their entertainment and services divisionposted an operating loss of $315 million, down from $402 million in losses for the same quarter last year. Unfortunately, revenues dropped from $1.2 billion to $929 million for the same period, a drop of 21 per cent. The company has attributed the lower revenues to reduced sales of the XBox 360. They have explained the losses as related to the launch of the Zune media player, and the costs of extending the XBox 360 warranty.

Maybe it’s just me, but at this point you would have to expect this to happen. I mean, everyone who is going to buy a 360 pretty much has one now. Sure, they’ll get some sales even as the console ages more, but if they have the expectation of maintaining anything like their 2006 numbers, well, they need to sober up a bit.