Microsoft today shared their earnings report for the fiscal 3rd quarter of the year. Overall, Microsoft beat expectations, largely due to strength in server software sales and Microsoft Office sales. Likewise, PC sales, and hence Windows 7 sales, beat expected volumes, but were weaker than in previous quarters due to flooding in Thailand.
However, because of weakness in Microsoft's entertainment division, their net income was down 2.4%. Income in the entertainment division, which includes the Xbox 360 console, was down 16.5% - a whopping $1.6 billion dollars, because of weak demand over the Holiday season. Console sales are down year-over-year because unlike last year, no new hardware was introduced this Holiday (Kinect was released last year).
Although some of the entertainment losses were due to research and development associated with Windows Phone, games console sales are down across the industry this year. Nintendo and Sony are both down year over year in console sales.
Since most of the news for Microsoft was fairly good, especially in the business sector, MS shares are up 20% this year, but Microsoft needs to acknowledge both the need for newer console hardware, and needs to address the threat that mobile technology has to their business. By this time next year, Microsoft will be talking about how Windows 8 has (or has not) addressed the mobile threat from Apple and Google, and they will (hopefully) be ramping up for the next version of the Xbox console.
No comments were found for this thread.