Microsoft Sells Plenty of Second-Quarter Consoles and Makes a Little Less Entertainment Cash Than Last Year

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MicrosoftMicrosoft announced the financial results for its fiscal second quarter ended December 31, 2011. Microsoft's gaming operations took in plenty of money, but the unit, overall, performed worse than in the comparable quarter the previous year. Read on for more details...
For the quarter ended December 31, 2011, Microsoft announced net income of $6.624 billion, compared to net income of $6.634 billion in the same quarter the previous year. Microsoft was sure to focus on how many key products are coming out in 2012, but most FI readers don't care about Microsoft's overall results.

The Entertainment and Devices Division (EDD), that includes Microsoft's gaming operations, posted operating income of $528 million for the quarter compared to $666 million in the same quarter the previous year. This was based on EDD revenues of $4.237 billion for the quarter, compared to revenues of $3.698 billion in the same quarter the prior year. So, while Microsoft brought in tremendously more revenues in its game division, it actually made less money. Microsoft said that the increase in revenue was due to increased Xbox 360 console sales, higher Xbox Live revenue and Skype revenue (following the Skype acquisition on October 13, 2011), offset by lower sales of Kinect sensors.

During the quarter, Microsoft shipped 8.2 million Xbox 360 consoles making the Xbox 360 installed base around 66 million, with around 18 million of those owning a Kinect sensor and 40 million members of Xbox Live. The lower revenues for the quarter were due to "... higher operating expenses, offset in part by revenue growth. Cost of revenue grew $633 million or 19% primarily due to higher royalty costs resulting from an increase in Xbox LIVE digital marketplace third-party content sold and sales of Gears of War 3 and due to payments made to Nokia related to joint strategic initiatives."

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This page contains a single entry by Editor published on January 19, 2012 4:40 PM.

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