Microsoft's Entertainment and Devices division, which includes its Xbox console business, recorded sales of $1.96 billion for the first quarter ended September 30, up from $1.75 billion for the same period last year.
Profits were $352 million, down from $386 million in 2010. The company noted that the Xbox 360 has been the best-selling console in the US for nine consecutive months, and that in the first quarter it launched the three million unit selling Gears of War 3.
Microsoft sold 2.3 million Xbox 360 units during the quarter, down from 2.8 million. Revenues in the games division were up due to Xbox Live sales.
For the entire Microsoft Corporation, revenues came in at a record $17.37 billion, up 7 per cent on last year, with net profits of $5.74 billion, up 6 per cent.
"We saw customer demand across the breadth of our products, resulting in record first-quarter revenue and another quarter of solid EPS growth," commented Peter Klein, chief financial officer at Microsoft.
"Our product portfolio is performing well, and we've got an impressive pipeline of products and services that positions us well for future growth."