In the three-month period ending December 31, 2005, Microsoft earned revenue of $11.84 billion (a tad short of analyst consensus expectations), a record for the company, despite weaker-than-expected sales of the Xbox 360 console due to supply constraints that translated into gamers going home without Xbox 360s during the holiday season. Investor reaction to Microsoft's results have been positive this morning. The company's shares are up nearly 4% on trading, and the overall market has been buoyed by the results as well.



The big story in this quarter's earnings were the Xbox 360 effects, which Investors Business Daily summarized best:

"Microsoft reported disappointing sales for the December quarter Thursday, blaming a failure to make enough Xbox 360 video game consoles to meet demand. But unearned revenue from customers signing long-term software contracts beat expectations, which cheered investors."

So what was the story with the Xbox 360? The slide above (courtesy Microsoft) summarizes Xbox 360 performance:

1.5 million consoles sold (.9M in America; .5M in Europe, and .1M in Japan)

More than four games were sold per Xbox 360 console
More than three accessories were sold per Xbox 360 console
Over 50% of Xbox 360 consumers are connected to Xbox Live
[Update 1: Corrected headline. The word "earnings" was incorrectly used instead of "revenues." The two are quite different. We apologize for the nubcake malapropism.]

News-Source: http://www.joystiq.com
MSFT Revenues: http://www.microsoft.com/msft/"