Microsoft Records First Ever Quarterly Revenue Drop

Andy Chalk

One Flag, One Fleet, One Cat
Nov 12, 2002
Microsoft Records First Ever Quarterly Revenue Drop

Microsoft [] reported yesterday that its quarterly revenue was down compared to the same period last year, the first time quarterly revenues have decreased since the company went public in 1986.

The company's revenues in the third quarter, which ended March 31, slid by six percent to $13.6 billion. Profits took a much sharper dive, down from $4.39 billion the previous year to $2.98 billion in this quarter, a drop of 32 percent. Still, it could have been worse; a cost-cutting program across several areas of the company prevented an even more dramatic reduction in profit.

Microsoft has been hit hard by consumer and corporate cuts in tech spending, resulting in significant drops in Windows and and business software sales. Research firms Office [] division slid eight percent to $2.9 billion.

Despite the downturn, analysts seemed generally upbeat about Microsoft's performance. "I think it was a good quarter in a tough environment," said Ragen MacKenzie [] analyst Taunya Sell. Microsoft did "the two things you can do in a tough environment - try to keep costs down, and make sure customers still want to buy your products." Microsoft CFO Chris Liddell said he expected the weakness to continue "through at least the next quarter."

Despite the slump, Xbox 360 [] and PC game revenues were actually up in the quarter, increasing by 16 percent, although revenue per unit was down due to recent price cuts. Microsoft sold 1.7 million Xbox 360 systems down the quarter, compared to 1.3 million in the previous year. Unfortunately, the Entertainment and Devices division as a whole took a slight loss, down two percent over the previous year.

Source: GamesIndustry []



Rocket Scientist
Feb 7, 2008
Khell_Sennet said:
Microsoft better get used to failing revenues. They base so much of their business model on the idea that everyone, business and home user, should be replacing their OS every three years, and their office suite every four years. But with the absurd pricetag of Windows and Office, people are more inclined to stick with whatever OS came with their PC and never upgrade, and purchase Office once, and once only.

Case and point, myself. I bought a full copy of XP when I built my PC, not one of those pre-installed copies where you only get a restore disc and not the actual software. I am going to use this copy of XP on my next PC, and the one after. Vista is a load of suck, and Windows 7 doesn't look any more promising. Until they release a new OS I actually like, why the hell would I change?

Add to all that, the rising popularity of Linux and OpenOffice, MS is in for a tough ride. Hell, I switched to OpenOffice because they disabled my fully-legal copy of Office2000. Why the fuck would I go and buy a new copy of Office when those fuckers cut access to the first one I paid for?
Yeah I had a fully-legal copy of XP installed on my system a few formats back. Then at one point I tried to download some updates and it gave me that "your version of windows is not legal" crap. Ever since the I've just downloaded and used the "Stripped to the Bone Edition" of XP.