Microsoft sold 5.2m Xbox 360 consoles in the quarter ending December 31st – 13 per cent down on the 6m units it sold in the same period in 2008.
The number brings the console's worldwide sales total to 39m units. 7.3m consoles were shipped in the period, down on the 8.3m that were shipped a year before.
However, operating profit at Microsoft's Entertainment & Devices Division, which includes both its Xbox and Zune MP3 player operations, was through the roof, climbing to $375m – almost triple the $130m seen in the same period a year before.
Costs fell to $478m, a reduction of 23 per cent, mainly due to savings in its Xbox operations.
Overall, EDD saw sales decline 12 per cent year-on-year, finishing at $2.9bn.
Both Xbox 360 hardware and software saw annual revenue declines, though Xbox Live revenues were said to be higher with the service now enjoying 23m members – a climb of 35 per cent compared to this time last year.
Combined with sales of PC games software, Microsoft's games revenue fell by $199m in the period. Xbox 360 price cuts were one of the main factors for this decline.
Looking forwards, Microsoft has – despite the upcoming launch of the motion-sensing Project Natal – predicted flat revenues for the Division over the next year.