Microsoft Corp (MSFT)
Earnings Release  FY12 Q1
Xbox 360 #1 console in the US
Strong Xbox LIVE momentum
3M copies of Gears of War 3 sold in first week
Content partnerships
Windows Phone update released
Windows Phone agreement with Samsung
Skype acquisition closed

EDD revenue increased primarily reflecting higher Xbox 360 platform revenue and Windows Phone revenue. Xbox 360 platform revenue grew $114 million or 7%, led by higher Xbox LIVE revenue, offset in part by decreased video game revenue and lower volumes of Xbox 360 consoles sold. Video game revenue decreased due to strong sales of Halo Reach in the prior year. We shipped 2.3 million Xbox 360 consoles during the first quarter of fiscal year 2012, compared with 2.8 million Xbox 360 consoles during the first quarter of fiscal year 2011.

EDD revenue for the three months ended September 30, 2011 included a favorable foreign currency impact of $51 million.

EDD operating income decreased reflecting higher operating expenses, offset in part by revenue growth. Cost of revenue grew $173 million or 19% primarily due to higher royalty costs resulting from an increase in Xbox LIVE digital marketplace third-party content sold and sales of Gears of War 3, offset in part by decreased product costs due to fewer sales of Xbox 360 consoles. Research and development expenses increased $24 million or 8%, primarily reflecting higher headcount-related expenses.

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Entertainment and Devices Division
RESULTS (in millions, except percentages)
Q112 Q111 Change
Revenue $ 1,963 $ 1,795 9%
Operating
Income
$ 352 $ 386 (9)%
FY12 Earnings Release Schedule
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