The biggest business in Robbie Bach's Entertainment & Devices Group at Microsoft is the Xbox 360 video game business. After many years of losses, the game business is poised to turn a profit, as is the E&D group itself, for the fiscal year ending June 30. Of course, one of the reasons is that the one-time $1.15 billion write-off to repair defective Xbox 360s was included in last year's fiscal results.
In spite of that debacle, Bach is more excited about this business than ever. He actually believes it's possible for Microsoft, Sony and Nintendo to succeed in the games business in spite of the serious competition because of the broadening of the game market. This is the second edited transcript of an interview Bach did with a small group of reporters in San Francisco.