Microsoft recently announced an extended warranty that would cost the company over a billion dollars. Now the company has reported a loss of $1.9 billion last fiscal year (ended this June). The “Entertainment and Devices Division” losses increased by 47% compared to last year, primarily driven by the new warranty extension.

Revenues were up by 28% on strong sales of the Xbox 360 console and the Zune, to $6.08 billion. Microsoft has shipped over 11 million Xbox 360 consoles so far, and hopes that the console business will turn profitable this fiscal year (ending June 2008).