- Despite an overall good earnings report, Microsoft’s Entertainment & Devices division, which houses the Xbox and Windows Phone, saw a 16 percent drop in revenue from last year.
- While Xbox remains the leading game console, sales were down 48 percent due to the “soft gaming console market,” according to Microsoft.
- “But with the console market slowing down — which won’t pick up until the next generation console war begins next year (not including Nintendo’s Wii U release this Fall) — it’s becoming increasingly clear that Windows Phone will have to start earning some money for the Entertainment & Devices division,” reports VentureBeat. “Microsoft can’t afford to have two major product lines sagging and bringing down an entire business division.”
- So far, the Nokia Lumia 900 has had a promising start, selling out in various retail stores. The phone could be the launching pad for the Windows Phone platform, but it has certainly been a costly endeavor for Microsoft.
- “According to Microsoft’s 10-Q quarterly filing today, the division’s operating income also decreased, due to payments made to Nokia (Microsoft is paying Nokia $1 billion over the next few years for the Windows Phone partnership), a 33 percent increase in R&D costs, and a 50 percent increase in sales and marketing expenses,” the article states.
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