Windows Sales Slump But Microsoft Still Takes Record Revenue

Microsoft are having a really bittersweet time at the moment, they are failing in sales of some of their goods but luckily excelling in others. Sales of Windows and PCs dropped, but it was mainly their Xbox 360 and Kinect that spared their blushes. Despite the sluggish sales on their PC software, it did not stop Microsoft from posting record fourth-quarter and full-year revenues.

The numbers that Microsoft have released show that revenues of $17.4 billion were taken in the 4th quarter, an 8% climb. Total revenues for the fiscal year added up to a record $69.9 billion, a 12% increase from the previous year. Net income for the quarter was $5.87 billion which is a 30% rise, with total income being $23.2 billion, an improvement of 23% compared to the previous year, according to Mashable.

It was clearly the increase in Microsoft’s business division and sensational games console sales which got them out of jail, The New York Times reports. Revenues in the business sector grew 16%, server and tools expanded 11%, with online service revenue increasing by 15%. These rises have been attributed to the success of Microsoft’s search engine, Bing. These are encouraging signs for Microsoft, especially if they are looking to get closer to Google.

The Entertainment & Devices division grew 45% for the year as a result of the Xbox 360 and Kinect’s immense popularity. Sales of the consoles are just one way of making the revenue, almost every gamer uses the subscription based online service, Xbox Live. This generates just as much revenue as the consoles with the purchase of Microsoft points and downloadable content also stacking up to explode Microsoft’s income. They recently leaking a page called “Tulalip” which looks like a secret social network they are readying for launch, integration with Xbox is a possibility.

So that is the good news for Microsoft, sadly their traditional method of income which is their Windows software, has taken a bit of a hit. Windows and Windows Live income fell by 2%, despite the fact that Windows 7 shifted over 400 million licenses. In general PC sales dropped 1% but the sales of PCs to businesses grew an encouraging 11%. It looks like Apple has been the thorn in Microsoft’s side this year.

Their sales of the iPad and iPad 2 have been cited as the cause for Microsoft’s poor PC sales. More and more people are switching from desktop PCs and laptops to tablet PCs and Apple’s are the dominant force in the market. Apple also just posted their impressive quarterly earnings, raking in a record $28.57 billion, with net profit standing at a $7.31 billion. It looks like Steve Jobs and the boys are still ahead. Microsoft may be planning a backlash though, it is rumored they will launch Windows 8 branded tablets in 2012.

Microsoft has also had a torrid time with the popularity and sales of their Windows Phone 7 mobile software. The OS has failed to establish itself in the market and does not even get a look in ahead of Android, iOS and BlackBerry OS. Microsoft CEO Steve Ballmer admitted that WP7 had struggled and described it as “very small“. In general will Microsoft be happy with poor sales in most divisions but exceptional sales in others?