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.