Microsoft Reports Lower Gaming-Related Operating Profits

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MicrosoftMicrosoft announced the financial results of its fiscal first quarter ended September 30, 2011. For the quarter, Microsoft announced net income of $5.738 billion, but those of you reading FI are probably more interested in the performance of the Entertainment and Devices Division (EDD), including Microsoft's game-related operations. Read on for the details...
For the quarter, EDD reported revenues of $1.963 billion, compared to revenues of $1.795 billion in the same quarter the previous year. That resulted in operating income for EDD of $352 million in this quarter, compared to operating income of $386 million in the same quarter the previous year.

Some highlights for the quarter include Microsoft's launch of Gears of War 3, selling around three million copies in the first week. Microsoft also announced that it will roll out a variety of TV-style offerings through the Xbox 360 this holiday season. Microsoft noted that the increase in revenues in EDD were due to both Xbox 360-related revenues and Windows Phone revenues. Revenues for the Xbox 360 platform were 7% ($114 million) higher, with increased Xbox Live revenue offsetting decreased game revenues and a lower volume of sold consoles. In part, that's because the comparable quarter the previous year included strong sales of Halo Reach. Microsoft shipped 2.3 million Xbox 360 consoles during the quarter, compared to 2.8 million in the same quarter the prior year. Revenues also included "a favorable currency impact of $51 million."

Microsoft noted that the decrease in EDD operating income was partially the result of higher operating expenses thanks to a higher share of third-party sales on Xbox Live and higher development expenses due to higher headcount.

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This page contains a single entry by Editor published on October 20, 2011 7:43 PM.

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