Microsoft Boosts Xbox Shipment Target

The company now expects to ship at least 5 million units by the end of June.
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Updated from 6:02 p.m. EDT

Microsoft

(MSFT) - Get Report

may put a few more Xbox 360s on store shelves than it previously expected, the company said Thursday.

The software giant now expects to ship at least 5 million of the new game consoles by the end of its fiscal year on June 30, company officials told investors on a conference call associated with its quarterly earnings report. Microsoft's prior guidance called for shipments of at least 4.5 million units. The company kept the top end of its shipment range unchanged at 5.5 million units.

Microsoft has

struggled to meet demand for the Xbox 360 since it

launched the device last fall. Partly as a result, video game publishers such as

Electronic Arts

(ERTS)

, who were expecting more Xbox 360s to make it into the marketplace by the end of the year, posted disappointing sales for the holiday season.

"Our supply challenges are behind us operationally," said Peter Moore, who helps lead Microsoft's video game efforts as a vice president in the company's interactive entertainment business.

Thus far, Microsoft has shipped 3.2 million Xbox 360s, including 1.8 million in North America, according to Moore.

Since software sales are largely dependent on the number of hardware consoles in consumers' hands, the more Xbox 360s Microsoft is able to sell and ship the better it is for the video game-software publishers. But, because Microsoft itself is losing money on each Xbox 360 it sells, the news is not so great for Microsoft's own near-term financials.

Indeed, Microsoft

announced on Thursday that its home and entertainment division, which includes Xbox hardware and game sales, posted an operating loss of $388 million on $1.06 billion in sales in the company's third quarter, compared with a loss of $175 million on $571 million in sales a year earlier.