Microsoft has reported a giant leap in full year profits at is Entertainment and Devices (EED) division, which covers the Xbox 360 and Zune platforms as well as PC and online games.
While annual revenue remained flat at $8.058 billion, profit leapt 529 per cent to $679 million in the fiscal year ended June 30. That’s despite full-year Xbox 360 shipments falling eight per cent to 10.3 million units.
"EDD revenue was nearly flat reflecting increased revenue from the non-gaming portion of the business, partially offset by decreased revenue from Xbox 360 platform and PC games,” Microsoft said in a statement. "Non-gaming revenue increased $35 million or 1% primarily reflecting increased sales of Windows Embedded device platforms, offset in part by decreased Zune and Windows Mobile revenue. Xbox 360 platform and PC game revenue decreased $12 million, primarily reflecting a reduction in Xbox 360 consoles sold and revenue per console, offset in part by increased Xbox Live revenue.
“EDD operating income increased due to reduced operating expenses. Cost of revenue decreased $528 million or 11%, primarily due to lower Xbox 360 console costs, offset in part by increased royalty costs resulting from increased Xbox Live digital marketplace third-party content sales and charges resulting from the discontinuation of the KIN phone. Research and development expenses decreased $34 million or 2%, primarily reflecting decreased third-party development and programming costs.”
The wider company saw full-year revenue up seven per cent to $62.5 billion, and profits rise 29 per cent to nearly $18.8 billion.
"We saw strong sales execution across all of our businesses, particularly in the enterprise with Windows 7 and Office 2010," said COO Kevin Turner. "Our transition to cloud services is well underway with offerings like Windows Azure and our Business Productivity Online Services, and we look forward to continuing our product momentum this fall with the upcoming launches of Windows Phone 7 and Xbox Kinect."