Microsoft Expects to Ship 10 Million Xbox 360 Consoles by End of Year

Microsoft Corp. (MSFT) on Thursday said it has shipped 6 million Xbox 360 video game consoles worldwide since releasing the unit about a year ago.

The company is "confident" it can meet its target to ship 10 million of its next-generation game consoles by the end of 2006, Microsoft Chief Financial Officer Chris Liddell said in an interview.

In July, Microsoft said it had shipped 5 million Xbox 360s.

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The software giant, which competes with Sony Corp. (SNE) and Nintendo Co. Ltd. in the video game console market, said 3.6 million units have already been sent to North America, 1.7 million went to Europe and that about 700,000 went to other regions.

Sony's competing PlayStation 3 and Nintendo's Wii will each make their debuts in November.

Microsoft, which posted an 11 percent rise in fiscal first- quarter profit on Thursday, said its entertainment and devices division that includes Xbox 360 trimmed its first-quarter loss to $96 million from $173 million a year earlier.

"We're progressively lowering the manufacturing costs of the console, so even for the ones we do sell, we are in a better shape from a loss per console perspective," Liddell said.

"It's not a linear progression, but as we go down the manufacturing curve in terms of experience and in terms of volume, we are progressively managing to get cost out."

In most cases, video game console makers lose money when they release new machines. Over time they can reap big profits as manufacturing costs fall and revenue related to games flows in.