Microsoft certainly had a great third quarter, as the three months ending December 31, 2006 saw a 76% increase in its Entertainment and Devices Division. Thankfully, the spike can be attributed - in part, anyway - to the Xbox 360, so it appears their next-gen console is going along well.

The division raked in an amazing $2.96 billion, which is one heck of a jump from the $1.69 billion it posted during the same period in 2005. More importantly for the games division, that number represented almost one-quarter of Microsoft's $12.54 billion total revenue, which is up 6% from 3Q 2005.

According to the official SEC filing, Microsoft stated the jump was due primarily to solid sales of the Xbox 360 and that nifty new media player, Zune. Further outlined in the report as contributing to the 76% leap were Microsoft's SQL Server, Windows Server, and Visual Studio. As for actual numbers regarding the 360 unit, the company estimates they sold around 4.4 million systems during the fiscal quarter. In stark contrast, they only managed to sell 1 million 360s in the second quarter.

And yet, despite it all, the Xbox endeavor has yet to turn a profit for the division. They posted operating losses of $289 million, which is actually higher than the $286 million they lost in 2005's third quarter. Microsoft has gone on record saying they expect to see the division turn a profit by the 2008 fiscal year, which begins this July. And overall, Microsoft's total profits were down more than 25% for the quarter, falling to $3.47 billion from the $4.66 billion they enjoyed during the same period in 2005.

Well, at least they had a good holiday season, and if they can really start churning out the games this year, they can begin that trek to net profit for the Xbox 360.