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Microsoft credits Vista and Halo 3 for strong fiscal Q1 2008 performance
Microsoft sees its fastest Q1 since 1999

We've heard from three major tech companies regarding third quarter performance over the past two weeks. Intel and Apple were both up, while AMD reported its third straight quarter of losses.

Today, it's Microsoft's turn and its results for fiscal Q1 2008 were quite impressive. The Redmond, Washington-based company recorded operating income of $5.92 billion USD and net income of $4.2 billion USD on revenues of $13.76 billion USD. Microsoft's revenue for Q1 represented a 27 percent increase from fiscal Q1 2007 and marks its best fiscal Q1 performance since 1999.

"This fiscal year is off to an outstanding start with the fastest revenue growth of any first quarter since 1999," said Microsoft CFO Chris Liddell. "Operating income growth of over 30% also reflects our ability to translate revenue into profits while making strategic investments for the future."

Not surprisingly, Microsoft also attributed a good portion of its growth to the success of Windows Vista which launched in late November 2006 for OEMs and late January 2007 for consumers.

"Customer demand for Windows Vista this quarter continued to build with double-digit growth in multi-year agreements by businesses and with the vast majority of consumers purchasing premium editions," said Kevin Johnson, remarked Microsoft Platform and Services Division at Microsoft President Kevin Johnson.

On a division-specific basis, Microsoft's Client, Server and Tools, Business, Online Service and Entertainment and Devices divisions reported Q1 2008 revenue growth of 25 percent, 16 percent, 20 percent, 25 percent and 91 percent respectively compared to fiscal Q1 2007.

The big jump in the Entertainment and Devices division can be attributed to none other than Halo 3. Halo 3 generated $170 million USD within a 24-hour period and raked in over $300 million USD during its opening week.

The release of Halo 3 also allowed Microsoft's Xbox 360 to outsell Nintendo's Wii console for the first time during the month of September. The company managed to move 527,000 Xbox 360s during September compared to 501,000 Wiis. This marks a dramatic improvement from the Xbox 360's August numbers of 276,000 units -- itself a big jump from July's tally of 170,000 units.

Halo 3's release was so profound that Hollywood blamed that lackluster box office debut of The Heartbreak Kid on Master Chief's third adventure.

Halo 3's financial impact was also enough to lift Microsoft's Entertainment and Devices division from a loss of $142 million USD during fiscal Q1 2007 to a $165 million USD profit.

Thanks to Microsoft's strong fiscal Q1 2008 performance, it's raising its outlook for fiscal 2008 performance. Its revenue forecasts are being adjusted from the $57.3 billion USD to $59.2 billion USD range. Operating income forecasts are also being raised to $23.5 billion USD from $22.45 billion USD.



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RE: Video game division profitable?!
By inperfectdarkness on 10/26/2007 10:09:41 AM , Rating: -1
entertainment division, yes. xbox division no. god do i hate the 800lbs gorilla sitting in the console arena bullying the market into mindless compliance. it must be nice to have billions of $$$ to toss away on an unprofitable gadget, only to do it again in another 4 years.


RE: Video game division profitable?!
By Locutus465 on 10/26/2007 10:26:13 AM , Rating: 3
Some might say that rather than bullying console customers, Microsoft put together a great little console with a well designed end user experince combined with great products and services... What is wrong with that?


RE: Video game division profitable?!
By RjBass on 10/26/2007 10:46:25 AM , Rating: 2
agreed ^^


RE: Video game division profitable?!
By hr824 on 10/26/2007 11:04:21 AM , Rating: 2
I agree as well....when it's not in transit to or from the repair center.


By Locutus465 on 10/26/2007 11:30:26 AM , Rating: 2
I can imagine that for the next gen console the boys in redmond are going to be complete QA nazi's (my 360 is on it's way to Houston right now :(). That's the acheles heal of the 360, poor QA work...

It's worth noting though, that my console didn't RROD (when I uses this I think self destruct due to heat to the point of no operation other than lights). Mine just puts up a single red light, throws out E 74 and tells me there's a hardware issue in 10 different languages, so lord only knows what is wrong with it (tried removing all but composit inputs and it still didn't work). Perhaps the DVD drive croaked, it did start making weird noises associated with the optical drive ::sigh::


RE: Video game division profitable?!
By yost007 on 10/26/2007 12:30:38 PM , Rating: 2
quote:
TextSome might say that rather than bullying console customers, Microsoft put together a great little console with a well designed end user experince combined with great products and services...


Well put, aside from the quality issues (which have been resolved) they have built a great console. I love my 360 (I got it on launch day). It used to freeze up once in awhile but that went away after the first system update.

And I use mine about 3 hours a day or more if my son watches movies. Just for good measure though I keep a fan blowing on it at all times when it is in use though. LOL


By Locutus465 on 10/26/2007 1:34:49 PM , Rating: 2
I'm curious what the current stats are... I have an HDMI premium that, while it didn't RROD, it did spit out "E 74" and basically died... I hope that (Unlike nintendo with my Wii) they actually tell me what went wrong.


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