It hasn't been long since Microsoft extended the warranty on all XBOX 360's by three years for the Three Red Lights problem, Microsoft today announced that the Entertainment and Devices Division (EDD) is currently in the red by $1.89 billion.

This is not surprising as the cost of the extension was estimated to be around $1.06 billion as well as a reduction in the number of XBOX360's sold. During the fiscal year 2007 (ending June 07), Microsoft had managed to ship 6.6 million consoles, 1.6 million more than the previous year, however this is worrying when you take into account that for almost half the previous year, the XBOX 360's weren't on sale. During the April 07 - June 07 quarter the sales failed to pass the million mark, only shipping 0.7 million units during the time.

However it isn't all bad news for Microsoft which managed to increase the annual revenue by 28% from $4.76 billion taken in last year, to this years $6.08 billion.

But while Microsoft's game-industry efforts proved costly, they were more than made up for by the company's other businesses. Despite the $1.06 billion 360 warranty charge, the company saw a $3.04 billion net income on $13.37 billion in revenue during its fourth fiscal quarter, 11 percent higher than the same period in 2006. For the full fiscal year, the company saw $14.7 billion of net income on revenues of $51.12 billion, a 15 percent increase over the prior fiscal year.

Krunal via uk.gamespot.com »