Microsoft Earnings Report: Xbox Still Sells

Xbox 360 Sales In 2012 Lower

Microsoft sees year-on-year growth as next-gen approaches.

With next-gen consoles likely a year away, Microsoft saw growth from last year with a new OS coming

Microsoft claims 2012 will be the Xbox’s best year ever as the company launches Windows 8. That’s a pretty deadly combination, as Microsoft released an earnings report that showed six percent growth over the previous year.

The earnings report covered Q1 2012 – January – March -, with quarterly earnings of $17.41 billion for the quarter. Operating income was $6.37 billion, up 12 percent from the prior year.

Net income for the quarter was $5.11 billion, compared with $5.23 billion the previous year. Microsoft’s CEO, Steve Ballmer, said the company was launching products across Microsoft while “delivering strong financial results.” Ballmer cited the launch of Windows 8 on PCs and tablets, Office 15, which will deliver “exceptional value” to customers. There was no mention of Windows Phone 8, which is expected to launch later this year.

The Microsoft Business Division reported $5.81 billion in third-quarter revenue, a nine percent increase from the previous year, which was due to the continued strong performance of Office 2010 with businesses and consumers.

Xbox down, but still selling

The Windows and Windows Live Division saw revenue of $4.62 billion, a four percent increase over the previous year. Windows 7 continues to be bought, up to 40 percent worldwide. Peter Klein, CFO at Microsoft, said the company saw strong demand for “business desktop and infrastructure offering.”

In contrasts, despite Microsoft’s claims that the Xbox 360 continues to sell, the Entertainment & Devices Division saw a 16 percent decrease from the previous year and posted revenue of $1.62 billion. Xbox Live now has 40 million users, and the Xbox 360 remained the top-selling console in the U.S. for the 15th consecutive month. That’s despite a 25 percent decrease across the industry during March and, with exclusives such as Halo 4 on the way, the final full year for the Xbox 360 looks solid.

It’ll be interesting to see how Microsoft tackle the launch of the next Xbox, and whether they rely on third-party titles again. Nintendo and Sony have a larger roster of first-party games that sell; Microsoft has three: Gears of War, Halo and Forza Motorsport.

Published: Monday, April 23rd, 2012 Last Modified: April 23, 2012

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