Today, Microsoft Corp released its quarterly financial statement to Wall Street and investors. The company's eight divisions reported a profit of $1.32 billion for the quarter ending March 31, substantially off the $2.14 billion profit the company reported for the same quarter a year ago. The filing attributes the disparity to a stock compensation expense of $501 million and a $1.89 billion charge that resulted from Microsoft's recent settlement with Sun Microsystems.

　　Of greatest interest to the gaming community, however, are the results of the Home and Entertainment division, the division that Xbox and game sales fall under. For the quarter, Microsoft claims Xbox sales were 30 percent higher this quarter compared to a year earlier. According to Microsoft, the increase is due in large part to the Xbox's recent price drop. In addition--and in numbers that conform to earlier projections--the company maintains that it expects to have sold between 14.5 and 16 million consoles by the end of June and also still expects to have a million Xbox Live subscribers by that time.

　　Home and Entertainment includes the Xbox, PC games, and consumer software and hardware, according to the company. It said Xbox revenue increased $81 million, or 35 percent, from the prior year’s third quarter, adding that $78 million of the division's total revenue was related to a higher volume of Xbox software sales and that $39 million of that revenue was due to higher console sales.

　　Home and Entertainment division revenue for the quarter was $530 million, compared to $453 million a year ago. However, when figuring in operating expenses, overall, the Xbox division reported a loss of $209 million. Microsoft defines operating expenses as "manufacturing and distribution costs for products and programs sold, operation costs related to product support service centers and product distribution centers, costs incurred to support and maintain Internet-based products and services, and costs associated with the delivery of consulting services."

　　The company still has a vast war chest lined with cash. At the end of the quarter, the tally of cash stood at $56 billion, $3 billion more than it reported just three months earlier.