For the second straight year, Microsoft’s entertainment division is reporting a fiscal year-end profit.  Given the state of the world economy, posting any sort of profit is quite an achievement, so the fact that MS is less in-the-black than last year is understandable.  For the fiscal year that ended June 30, the hardware and software giant posted profits of $169 million, down 2/3 from the previous year’s impressive $497 million.

Microsoft cited “decreased Xbox 360 console sales and decreased revenue per Xbox 360 console due to price reductions during the past 12 months” as reasons for the drop-off.  Console sales did drop off during the 4th quarter, but for the year overall, the Xbox 360 actually moved more units than last year; 11.2 million versus 8.7 million.  A lower price per box does account for some of the decrease, though.

The myth of video games being recession-proof is starting to disappear, but Microsoft, despite a rough financial year, still managed to generate $169 million in profits and a staggering $14.57 billion in total net income.

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