Microsoft's Xbox has big quarter

Microsoft (NASDAQ: MSFT) says it sold 4.3 million Xbox 360s in the last quarter of 2007. The popularity of the company's Halo 3 game helped.

According to Reuters, "'Holiday 2007 was a blockbuster season for the gaming industry,' Microsoft said, adding that the Xbox 360 has kept its lead over rivals in terms of total dollars spent on hardware and software." The company did say that its online game download service had problems toward the end of the year and offered a free game to 8 million users.

The news means that Microsoft's device division will probably be profitable for the fourth quarter. It lost money for years. But it also raises the issue of why the world's largest software company is in the business at all. The division brought in $1.9 billion last quarter, but had an operating profit of only $134 million.

The problems that the company has had with its game download service and past issues with the Xbox hardware only give Redmond a bad name. That does not exactly help the image of its core software business.

Douglas A. McIntyre is an editor at 247wallst.com.