Halo effect not enough to prevent Xbox 360 sales decline

Even though Microsoft's best selling game came out right before the holiday quarter, sales of the Xbox 360 console dipped slightly year-over-year.

Microsoft said it had shipped 4.3 million consoles during the final calendar quarter of 2007, down 2.3% from the year previous. Halo 3 was released about a week before the quarter began.

Halo provided a significant boost to the Redmond company's bottom line, breaking records for sales in its first week -- some $300 million. 2.7 million played the game over Xbox Live in the first week alone.

But the success was only enough to essentially keep pace with market-leading Nintendo, and its not all that speculative to conclude that if the game had not been released, Xbox 360's slide would have been much steeper.

It should be added however that much of the hardware buying activity due to Halo happened in the quarter before: it doubled its year previous numbers there, selling some 1.8 million consoles in the July-September period.

Not all is necessarily bad in Xbox land, however. For the second quarter in a row, the division posted $357 million in profits, beating the quarter previous totals of $165 million. This continues the reversal of a trend where the gaming division had been losing money for over a half-decade.