Microsoft suffers first ever quarterly drop

Global software and hardware company Microsoft has suffered its first quarterly drop in revenues and sales in its 23 years as a public company, though its Xbox operations remained one of strongest parts of the business.

Revenues for the quarter ending March 31st were down six per cent on the same period last year, hitting $13.65bn. Net income fell 32 per cent to $2.98bn, though operating income was up three per cent at $44bn. Online revenue was also down, decreasing by 14 per cent to $721m.

The company’s Entertainment and Devices Division, which houses its Xbox operations, suffered a drop in sales and losses of $31m, though 360 and PC game revenue was up 16 per cent. 1.7m Xbox 360 consoles were shipped during the period – up by 400,000 compared to the same period in 2008.

The global weakness of the PC and server markets was named as the main catalyst of the results, with Microsoft’s Business Division performing badly.

With our continued R&D investment and our broad suite of products and services, we remain in a great position to compete and gain share in the marketplace,” Microsoft’s chief operating officer Kevin Turner stated.

During the quarter, Microsoft released the beta version of the Windows 7 operating system, which remains on track for a fiscal year 2010 launch. Development milestones were achieved on other products including Microsoft Office 2010, Windows Server 2008 R2 and Windows Mobile.

Chief financial officer Chris Liddell added: While market conditions remained weak during the quarter, I was pleased with the organisation’s ability to offset revenue pressures with the swift implementation of cost-savings initiatives.

We expect the weakness to continue through at least the next quarter.”