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Microsoft Q1 revenue up 9%

Entertainment and Devices posts another profit, but games revenues fall

Microsoft has reported its Q1 2009 financial results, headlining with a 9 per cent increase in overall group revenue to over USD 15 billion.

The majority of those sales came from the Business, Client and Server and Tools divisions, although Entertainment and Devices (EDD) took USD 1.814 billion - down from USD 1.929 in the same period last year, although the latter number was skewed by the Halo 3 launch in 2007 and was also impacted by the Xbox 360 price cuts.

Importantly, EDD - which oversees the Xbox and Microsoft Game Studios businesses - posted another profit. For the three months to the end of September 30, operating income hit USD 178 million, up from USD 167 last year.

However, while the division overall performed well, revenue from the Xbox 360 and PC platforms fell by 22 per cent - despite the company shipping 2.2 million consoles, a number up by 400,000 in the previous year. That figure puts lifetime sales of the console at over 22 million, just 2 million shy of the original Xbox platform.

EDD's numbers were instead buoyed by sales of software for the Mac, the Zune and mobile and embedded device platforms, which was up 51 per cent to USD 216 million.

The increase in operating income was partly driven by decreased Xbox 360 manufacturing costs, while sales and marketing expenses were also down.

The company added that it expected the rest of the fiscal year to demonstrate sustained profitability, despite predicting "revenue to be flat or to decrease relative to the prior fiscal year due to year-over-year variations in launches, volumes, mix, and prices across our portfolio of products and services," according a statement.

Group operating income rose by 3 per cent to USD 5.999 billion, while diluted earnings per share were up by 7 per cent to USD 0.48.