Microsoft's EDD posted earnings of $357 million for the second quarter of its fiscal year ending in June. The division previously posted a profit of $165 million in Q1 for a combined $524 million in the first half of the year -- significantly up from the same period last year which incurred $423 million in losses.

While the Entertainment and Devices Division encompasses Zune and PC games, Microsoft said overall performance was "primarily due to increased Xbox 360 platform sales," including console sales, game sales led by Halo 3, Xbox Live revenues, and accessory sales. A decrease in Xbox 360 manufacturing and promotional costs was also cited.

The news marks the second consecutive quarter in which Microsoft made money off Xbox gaming and a favorable outlook for the future. So far, life-to-date Xbox losses total an estimated $6 billion (with a "b") since the platform's debut in November 2001.