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The Q1 report for Microsoft is overall a mixed bag.

Net revenues ending for their first quarter were down 5%, totaling $22.2 billion, compared to $23.4 billion of last year. In fact, most of their numbers were down slightly, with their operating income down 3%, and their earnings for the quarter down 11%.

The Microsoft games division was a major earner, growing 27% for the quarter. Much of this growth is attributed to Xbox Live transactions and first party games. In fact, the Xbox One had very slow growth; selling only 1.4 million units, compared to 1.1 million units last year at this time. Xbox One consoles overall generated $86 million, a 10% increase for the company.

The bigger winner would be Microsoft Surface, which generated $888 million in revenue, an increase of 117% from last year. Commercial cloud revenue also increased 88%, thanks in part to Office 365, Azure and Dynamics CRM Onine.

Finally, the biggest loss came from Windows Phone, earning only $552 million. This would be a 68% decrease in revenue from last year. Microsoft attributes this loss in revenue due to over $382 million of it being reorganized in the wake of their deal with Nokia.

Microsoft is downplaying the slight losses and slow growth.  According to executive vice president and chief financial officer Amy Hood, “We finished the fiscal year with solid progress against our strategic priorities, through strong execution and financial discipline, which is reflected in our results for the quarter and the year.”

Much of the focus early this year is on the rollout of Windows 10, which has just begun this past week.”The upcoming release of Windows 10 will create new opportunities for Microsoft and our ecosystem.” stated Satya Nadella, chief executive officer of Microsoft.

So is Microsoft on the right track, or are they going nowhere fast? What do you think? Share your thoughts in the comments below. 

Robert Grosso

Staff Writer

A game playing, college teaching, erudite-minded scholar who happens to write some articles every so often. Have worked as a journalist, critic, educator and blogger for over five years now, with articles published (as user editorials) on Game Revolution and Giant Bomb as well as a contributor for the websites Angry Bananas and Blistered Thumbs. Now making TechRaptor my home.