Overall, a good quarter for Microsoft. Revenue was up 6% year-to-year thanks largely to the Server & Tools Division and the Business Division (read: Office).
In other words, the quarter was driven by the enterprise side of the company.
Windows growth was up only slightly (4%), but that’s probably to be expected as Windows 8 nears. And Microsoft specifically called out the strong enterprise growth there as well.
On the full-on consumer side of things… the Entertainment & Devices Division (read: Xbox) saw revenue decrease 16% year-to-year. That’s not good. While Xbox was the top-selling console for the 15th straight month, the company cited a “soft gaming console market”.
For the quarter, the division actually swung to a loss — $229 million in the red.
A new Xbox can’t come soon enough for the company. And it’s not gonna happen until next year.
But hands-down the best part of the release is this:
The Online Services Division reported revenue of $707 million, a 6% increase from the prior year period, and operating loss improvement of approximately $300 million.
"Operating loss improvement". That’s one way to put it.
In English, the Online Services Division continues to bleed: it lost $479 million last quarter. An improvement, yes — but mostly thanks to less costs. Revenues were only up $40 million.
The division has not posted a profit since 2005.
Update: While Microsoft has set up a Windows Phone Division, for financial purposes, the devices are reported under the Entertainment & Devices Division (but the numbers aren’t broken out). It’s certainly possible that high Windows Phone costs contributed greatly to the E&D loss.
Update 2: As Mary Jo Foley points out, it was indeed the greatly depressed Xbox 360 sales that led to the loss.