Despite costly Xbox repairs, the software titan turned in a solid fiscal fourth-quarter performance, and raised revenue guidance for 2008...
Of particular interest to gamers:
Baked into the new guidance is Microsoft's expectation that sales in its Entertainment & Devices Div., which includes the Xbox unit, will climb 10% to 19% in fiscal 2008. The wide range is notable because it gives the unit's management the flexibility to cut console prices during the year, something most analysts expect, particularly after Sony (SNE) reduced prices on the most recent iteration of the PlayStation console. "My operating assumption is that you get a price cut before Christmas," Di Bona says. He says the reduction wouldn't come until after the Sept. 25 release of Halo 3, the follow-up to two of the hottest-selling titles in video game console history.
Charles Di Bona II is a senior research analyst at Sanford C. Bernstein.