Microsoft Corp (MSFT)
Earnings Release  FY13 Q2
Continued leadership position in console market
5.9M consoles sold, down 28%
Halo 4 best-selling title of gaming franchise
Xbox LIVE members >40 million
Windows Phone sales were over 4 times greater than last year
138 billion minutes of calls on Skype in quarter, up 59%

EDD revenue decreased, primarily due to lower Xbox 360 platform revenue, offset in part by higher Windows Phone revenue. Xbox 360 platform revenue decreased $1.1 billion or 29%, due mainly to lower volumes of consoles sold and lower video game revenue, offset in part by higher Xbox LIVE revenue. We shipped 5.9 million Xbox 360 consoles during the second quarter of fiscal year 2013, compared with 8.2 million Xbox 360 consoles during the second quarter of fiscal year 2012. Video game revenue decreased, primarily due to $380 million of revenue deferred associated with the Video Game Deferral. Windows Phone revenue increased $546 million, including patent licensing revenue and increased sales of Windows Phone licenses.

EDD operating income increased, due mainly to lower cost of revenue and sales and marketing expenses, offset in part by decreased revenue and increased research and development expenses. Cost of revenue decreased $544 million or 19%, mainly due to decreased sales of Xbox 360 consoles, offset in part by payments made to Nokia related to joint strategic initiatives and increased royalties on Xbox LIVE content and video games. Sales and marketing expenses decreased $92 million or 21%, primarily reflecting decreased Xbox 360 platform marketing. Research and development expenses increased $98 million or 25%, primarily reflecting higher headcount-related expenses.

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Entertainment and Devices Division
RESULTS (in millions, except percentages)
Q213 Q212 Change
Revenue $ 3,772 $ 4,238 (11)%
Operating
Income
$ 596 $ 517 15%
FY13 Earnings Release Schedule
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