Strong sales of Windows Vista have lead to Microsoft posting record profits for its third financial quarter ending March 31st, but the firm’s Entertainment and Devices division, the home of its Xbox and PC gaming operations, reported continuing losses.

Overall revenue for the quarter ending March 31st was $14.4 billion, up 32 per cent from the same period the year before. Operating income hit $6.59 billion and net income reached $4.93 billion. The popularity of Windows Vista and Microsoft Office were credited as the main driving factors.

However, revenue for the Entertainment and Devices Divisions dropped by over 20 per cent to $929 million. And whilst operating loss improved by 22 per cent, it still reached a hefty $315 million.

The firm attributed the revenue drop to decreased Xbox 360 console sales, a trend perhaps unsurprising considering that both of Microsoft’s major competitors recently bought their next-gen machines to market.

It also stated the Xbox 360’s worldwide shipments had now reached 11 million following total quarterly hardware sales of 500,000 units. In the same period last year the company sold 1.7 million units.

Figures for the nine months ending March 31st were better, with Entertainment Devices Division revenues climbing 42 per cent to $4.9 billion. Operating losses, whilst reaching $693 million, dropped by 20 per cent.