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Microsoft income drops despite strong Windows sales

The Xbox and entertainment business slips

Microsoft has reported a drop in net income after poor entertainment sales but saw good Windows adoption.

The firm's first quarter revenue hit $17bn, a six percent increase compared to 2011. However, its net income dropped slightly to $5.11bn - lower than last year's $5.23bn but higher than expected.

Windows 8 is due to launch later this but adoption of Windows 7 has been strong so far this year. The Windows and Windows Live Division recorded a four percent increase in revenue to $4.6bn.

Unfortunately its Entertainment department saw a large 16 percent drop in revenue to $1.62 with poor sales of its Xbox 360 console in a 'soft gaming console market'.

The server and tools and business divisions saw good growth of 14 percent and nine percent, respectively. Revenue came in a $4.57bn and $5.81bn, respectively for these sectors.

"We’re driving toward exciting launches across the entire company, while delivering strong financial results," said Steve Ballmer, CEO of Microsoft.

"With the upcoming release of new Windows 8 PCs and tablets, the next version of Office, and a wide array of products and services for the enterprise and consumers, we will be delivering exceptional value to all our customers in the year ahead."


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