Microsoft Q1 FY12 results: LIVE revenue up 7%, costs up 19%

Microsoft has released its financial report for the quarter ending September 30, showing a rise in sales but a dropping off of profits for its Entertainment division.

Microsoft posted an increase in overall sales for its Entertainment division. At $1.96 billion, it's a jump of 12 percent on last year's $1.75 billion.

Nevertheless, profits were down, with the division dropping $352 million in Microsoft's coffers, a nine percent drop on last year, thanks to a 19 percent increase in costs.

Royalty fees paid to new content partners was a significant contributing factor; Microsoft singled out its new agreements as a highlight of the quarter.

Within the Xbox business, revenues were up thanks to an increase of seven percent in Live sales.

Despite a drop off in hardware sales, with 2.3 million Xbox 360 consoles shifted during the quarter as opposed to CY 2010's 2.8 million, Xbox 360 took its place as top-selling hardware for the ninth consecutive month, and Microsoft highlighted Gears of War 3's performance of 3 million sales in its first week alone.

Overall, the Microsoft corporate body achieved a record breaking quarterly revenue result of $17.37 billion, an increase of seven percent year on year.

Operating income, net income, and diluted earnings per share for the quarter were $7.20 billion, $5.74 billion, and $0.68 per share.