Microsoft's Xbox 360 has been around for eight holidays now, and while still a strong seller, sales are heading downward.
Microsoft said its Entertainment and Devices Division saw lower revenues and higher operating profits during the December quarter, driven by lower video game console sales.
The company said it shipped 5.9 million Xbox 360 consoles during the second fiscal quarter, down from 8.2 million from the same period a year ago. Despite the decline, Xbox 360 remained the top-selling video game console in the U.S.
The drop in unit sales comes as Microsoft is heavily rumored to unveil the Xbox 360 successor sometime in the coming months.
Revenue in the division, which houses businesses including Xbox and Windows Phone, were down 11 percent for the quarter to $3.8 billion, driven by the lower console sales. Microsoft also noted that a $380 million video game deferral also impacted revenues.
Operating income in the division was up 15 percent to $596 million, thanks in part to lower sales and marketing expenses.
Across the entire company, Microsoft reported $21.5 billion in revenue for the quarter and $6.38 billion in profits.