Redmond, Washington based software giant Microsoft has recently released their Q3 (ending March 31, 2011) results, reporting a new company record, as the firm brought home $16.43 billion in revenues. Of this massive number, $5.23 billion is counted towards net income, much higher than analysts’ projections, much to the delight of investors, which saw a valuation of $0.61/share. This revenue number may signal a wind of change at Microsoft, as figures are up a healthy 31 percent year-over-year.
Microsoft’s Business Division fared well YOY, with a decent growth of 21 percent, and points to Office 2010 as the fastest selling version of the popular office suite across the product’s lifetime.
Hardware products including Servers and their associated tools saw an 11 percent growth, the division’s fourth consecutive double-digit growth quarter. Microsoft points to a strong enterprise adoption rate of Windows Server 2008 R2, SQL Server 2008 R2, and System Center is primary drivers of this growth. Likewise, Microsoft reports that Windows 7 has now officially become the hottest selling OS in the company’s history, with over 350 million licenses sold. Despite these impressive numbers, overall revenue was down by 4 percent in Q3, which Microsoft attributes to decreased PC sales.
“We delivered strong third quarter revenue from our business customers, driven by outstanding performance from Windows Server, SQL database, SharePoint, Exchange, Lync and increasingly our cloud services,” said Kevin Turner, chief operating officer at Microsoft in a statement. “Office had another huge quarter, again exceeding everyone’s expectations, and the addition of Office 365 will make our cloud productivity solutions even more compelling. We continue to see strong adoption of our cloud-based services among the Fortune 500.”
And while all the business-focused divisions are (for the most part) reporting increases, it’s not until you look at Microsoft’s Entertainment and Devices category, where these numbers pale in comparison. This division alone is clearly the driving force behind the record numbers, reporting a whopping 60 percent year-over-year growth. And the primary driver with this division? It should come as no surprise that Microsoft’s motion sensing Kinect for Xbox, which became the fastest selling consumer electronics device in history, is also driving Xbox sales, resulting in happy days in Redmond.
“We delivered strong financial results despite a mixed PC environment, which demonstrates the strength and breadth of our businesses,” said Peter Klein, chief financial officer at Microsof in a statement. “Consumers are purchasing Office 2010, Xbox and Kinect at tremendous rates, and businesses of all sizes are purchasing Microsoft platforms and applications.”
Microsoft was reluctant to speak about it’s Windows Phone 7 platform, only mentioning on an earning call that “product reviews are good,” and that, “customer satisfaction is high.” With the growing prominence of mobile, and thus tablet, based user-consumption, can Microsoft now repeat the Xbox process, and get into the wireless game before it’s too late?
Hailing from the Visceral Games branch of EA, the social (read Facebook) game launched yesterday, and serves two purposes. ‘Go To Hell’ makes use of the famous poem’s nine circles of hell. The game itself is nothing really we haven’t seen already done. I.e., gameplay is a well worn – don’t like so and so? Send them to the ‘anger’ ring of hell. Mad at an ex-lover? Send them to the ‘lust’ ring. You get the idea. However, the game is not limited solely to the Facebook platform, as users can share play data across other online platforms including MySpace, iGoogle, and Twitter.
If computer hardware/software making companies getting into gaming sounds familiar, the most obvious example is Microsoft’s Xbox console, but one can’t count out Dell and or Alienware’s commitment to addressing what gamers are after. For decades Apple has been doing things a differently (remember the Think Different advertising campaign?), and their committed entry to the gaming market is no different.
And it’s not just the plastic wrapped shiny discs that aren’t moving off retailers’ shelves. Console sales revenues took a 38 percent hit, totaling only $382.6 million. Of the big three, Microsoft’s Xbox was the only console that actually increased sales during the month of June. Nintendo’s Wii saw a drop of 45 percent, and Sony’s (arguably overpriced) PS3 got clobbered with a 59 percent drop in sales.
