Microsoft Profits $5.31 Billion, Xbox R&D Up, 70M Xbox 360 Shipped - News

by William D'Angelo , posted on 19 October 2012 / 13,445 Views

Microsoft has released its first quarter earning report which ended on September 30. Microsoft as a whole reached revenue of $16.01 billion, down from $17.37 billion during the same period a year ago. Microsoft operating income was at $5.31 billion, down from $7.20 billion a year ago.

The second quarter will be crucial due to the release of Windows, the Surface tablet, and the holiday boost to its video game division. "The launch of Windows 8 is the beginning of a new era at Microsoft," said Steve Ballmer, chief executive officer at Microsoft. "Investments we’ve made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers, and partners."

The Entertainment and Devices Division, which includes the Xbox 360, had revenue of $1.95 billion, which is down just one percent compared to last year. Profits fell to just $19 million from $340 million a year ago, due to the increase in R&D. R&D spending increased 44 percent to $318 million for quarter, due to the Skype acquisition and the staffing up of its Xbox division.

Video game software revenue was down, mainly due to the release of Gears of War 3 last year. "Video game revenue decreased primarily due to the release of Gears of War 3 in the first quarter of fiscal year 2012 with no comparable major releases in the first quarter of fiscal year 2013," the company explained. however Xbox Live revenue continues to increase.

Microsoft shipped 1.7 million consoles, down from 2.3 million a year ago. That brings Microsoft's cumulative total of Xbox 360 units shipped to retail to 70.0 million units as of September 30, 2012.

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eastside49er (on 19 October 2012)

When you profit with R&D spending that much, that is pretty good. Obviously they are gearing up for the next system which IMO will be out by next November or early 2014.

sethnintendo (on 19 October 2012)

So their game division made a small profit even with increased R&D. They will need to release their system next holiday season. While the die hard fans will wait some gamers might jump ship if the Wii U is by itself for too long. I just remember the N64 days when I was waiting on it to release and it kept being pushed back. That is when I went ahead and got a PS1 at launch when I realized the N64 was being delayed again. I am pretty sure they will release their next system '13 holiday season.

sidious164 (on 19 October 2012)

at least they are profiting, that's what it's all about.

pharmassist (on 19 October 2012)

hopefully, they announce the next xbox next year.

usrevenge (on 19 October 2012)

there was an article released yesterday that said xbox profits dropped by 24%.