The company also increased its profits slightly over last year, posting net income of $2.79 billion (26 cents per share), compared to $2.74 billion last year.
However, the company indicated that despite the uptick in revenue and profit (which beat Wall Street expectations), the road ahead was uncertain due to uncertainties in its core PC and enterprise networks market.
Of note, Microsoft's home and entertainment division, which includes its PC game publishing business and Xbox group, posted a large decrease in revenue from last year. The division pulled in $453 million, compared with $778 million a year ago -- a 42% decrease. While the company did not break down that division's finances into more detail, it is commonly assumed that the growing losses incurred by the sale of each Xbox (last year at this time the Xbox sold for $299, now it's $199) were a large factor in the revenue downturn.
