Microsoft reports major profits

Strong results in entertainment services via the Xbox, and business services via Office, have added up to give Microsoft a healthy earnings report for the fourth quarter and fiscal year.

Microsoft has announced fourth-quarter revenue of US$17.4 billion, an 8% increase on the same period last year.

This brought Microsoft's revenue for the fiscal year to $69.9 billion, up 12% from the year before.

The biggest increase was in the entertainment division, with sales associated with the Xbox up 30% for the quarter and 45% for the year.

Microsoft staple Office also continues to serve the company well, with Microsoft's business division reporting growth of 7% for the quarter and 16% for the year. The release of the cloud-based Office 365 should ensure Microsoft stays ahead in this area.

The big area of concern is Microsoft Windows, with revenue for the department in charge of the operating system declining 1% for the quarter and 2% for the year. Microsoft previewed Windows 8 in June; however, analysts say the problem stems from the growing adoption of tablet technology running on systems like Android and iOS.

Looking forward, Microsoft says the move into cloud services places the company in a strong position for growth.

"We continue to see strong business demand across all of our products," says Microsoft COO, Kevin Turner, "from small businesses all the way up to the largest global enterprises.

"Our move to cloud services continues with the release and momentum of Office 365 and growth in Windows Azure.

"We're providing our customers seamless and powerful ways to move to the cloud, and we are well positioned for the coming year.