By Vamien McKalin email: firstname.lastname@example.org | Jan 25, 2013 06:30 PM EST
Windows 8 didn't kick off in ways Microsoft and its partners would have liked, but that is not stopping the Redmond giant from posting record revenue. In a Microsoft earnings call, the company announced $21.5 billion in revenue; of that, $6.38 billion is pure profit.
The Windows division is the biggest revenue maker for Microsoft generating $5.9 billion, despite Windows 8 starting off slowly. That is up from 24 percent when compared to a year ago. Ironically, this is largely thanks to Windows 8 release and the 60 million licenses Microsoft sold to OEMs. The Windows division is also home to the Surface tablet and if Microsoft had allowed third-party retailers to sell the device from the beginning, revenues and profit could have been higher.
Despite growth in the Windows division revenue, Microsoft's business division revenue fell by 10 percent to $5.7 billion year over year. However, the server and tools division helped the business division from declining further, by generating $5.19 billion in revenue, a 9 percent jump compared to a year ago.
Things weren't so bright for the Entertainment division, as revenue and profit continues to sink. This is likely due to the need of new consoles to excite gamers; this should be rectified by the end of 2013 with the release of the Xbox 720. The Entertainment division could only manage $3.77 billion in revenue, a 7 percent decline compared to a year ago. The Online Services division, however, grew to $869 million in revenue, an 11 percent growth year-over-year. This proves Bing and other services like Xbox Live and Xbox Music are doing great things and should do even better come 2014.
While revenue and profit are up at Microsoft and everyone is happy, things could take a U-turn if Windows 8 fails to gain traction as the Windows division is the biggest money maker for Microsoft. Most importantly, what Microsoft needs right now is substantial growth for Windows Phone 8, and it may try to help realize that with its own Surface-branded smartphone.