Xbox division down 12% but Windows 7 drives record Q2 revenue for Microsoft

While Microsoft posted "record" revenues of $19.02 billion for the second quarter ending December 31, 2009 – driven by "exceptional demand" for the new OS on the block, Windows 7 – the Entertainment and Devices Division, home to the Xbox 360 and PC gaming businesses, wasn't as successful. That's an inversion of last quarter, for those of you keeping track. "EDD revenue decreased reflecting a $295 million or 12% decline in Xbox 360 platform and PC game revenue," the company's 10-Q form reports. "This decrease was due mainly to decreased revenue from Xbox 360 video games, decreased Xbox 360 consoles sold, and decreased revenue per console, offset in part by increased Xbox Live revenue."

Microsoft blames the dip in game revenue to a shortage of major releases; the same period last year saw the release of "two significant games," most likely Fable 2 and Gears of War 2. It reports sales of 5.2 million Xbox 360s for the quarter, a drop from the 6 million sold during the same period last year. And lastly, that pesky price drop is messing up this year's numbers. There are some silver linings: Xbox Live revenue is up, the unit's operating income is up nearly 300% "due to reduced operating expenses." You can thank "lower Xbox 360 console costs" and "decreased marketing for the Xbox 360 platform" for that savings. It looks like all eyes are on you, Mr. Wake and Mr. Supercop, to pick things up in the next fiscal half.

[Via IndustryGamers]