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Microsoft Entertainment Division reports loss, again

The latest Microsoft financial report has outperformed analyst expectations, aided by a rise in sales of the Windows operating system. Skeptics could say that people have been playing with the early Windows 8 build and have decided that the move isn’t worth it.

Profits from the Entertainment and Devices Division, responsible for the Xbox 360 console and the Windows Phone mobile software groups were lower than expected. The report shows that the E&D Division posted a loss of $229 million, down from a profit of $210 million, the year before. The release of the next generation Xbox console is due soon, and is clearly needed if Microsoft want to help boost sales.

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Revenues hit $17.4 billion (£10.8 billion), which is up 6 percent on a year before, however profits dropped to $5.1 billion, down from $5.2 billion the year previous.

Apple’s market value is now twice that of Microsoft and revenues from their iPhone range alone exceeded the overall revenue stream from Microsoft. Incredible.

The battle for Bing to take market share and become a serious contender to Google is still a pipe dream, as it is still losing money for the company. The Online Services division posted a loss of $479 million, compared to $458 million the quarter before.

Microsoft still generate most of their profit from their Windows and Office software. Windows revenue increased by 3.8% to $4.6 billion which is unusual as Windows PC sales have only grown by 1.9% in the quarter.

Kim Forrest an Analyst at Fort Pitt Capital Group said “Next year at this time we should be talking about Windows 8 mobile and how it’s contributing or not to the company. But we really need Windows 8 to come out on all devices, to see if it’s going to have that synergy or not.”

Kitguru says: Microsoft failed to report sales figures for their Windows Phone mobile software which would indicate poor performance, as analysts have been predicting for months.

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