Microsoft weathers rough economic waters

Xbox 360 maker posts record revenues for the quarter; 2.2 million systems sold helps game biz nearly match Halo 3 quarter's numbers.


The world's economic woes are affecting companies in the game industry differently. Earlier today, Sony cut its profits projections sharply in light of economic conditions, while French publisher Ubisoft touted consecutive quarters of surpassed sales expectations.

After the close of the US market, Microsoft released its own financial recap, emphasizing that the $15.06 billion in sales it brought in for the three months ended September 30 was a new record for the quarter. To complement the company's 9 percent revenue jump, its net profits showed a mild increase to $4.37 billion, up less than 2 percent year-over-year.

Microsoft listed Xbox 360 console sales of 2.2 million (a 20 percent year-over-year spike) as one important factor in its record-breaking revenues. It also said that the Xbox Live service had passed the 14 million member mark during the quarter. Despite those factors, Microsoft's entertainment and devices division actually saw shrinking sales for the three months. The division brought in $1.81 billion for the quarter, compared to the $1.93 billion it tallied during the same period last year.

It's important to note that Microsoft dropped the price of its entire line of Xbox 360 systems during the quarter, and that the prior year's numbers were helped tremendously by the release of Halo 3. Despite the slipping sales, the entertainment and devices division still posted an operating profit of $178 million for the quarter, a bump of nearly 7 percent from the $167 million it managed over the same period the year before.

"In a challenging economic environment, the first-quarter results exhibit the strength and diversity of our business model," Microsoft chief financial officer Chris Liddell said in a statement.

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