Summary: New numbers suggest that the decline of crucial Microsoft products sharpens

MICROSOFT'S XBOX -- including 360 -- has not only cost the company billions in losses. Several months ago the unit was still operating at a loss and now that Microsoft releases bad figures that are partly influenced by GNU/Linux it turns out that XBox losses deepen. According to one source, "Microsoft Q4 games revenue falls 25%."

Microsoft’s fiscal fourth-quarter sales from Xbox 360 consoles and videogames fell from a year earlier as gamers bought less hardware and software and spent more time playing free games online.

Here are some concrete numbers:

The company's Entertainment and Devices Division, which contains its games business, as well as the Zune and other miscellaneous items, saw a 25 percent year-over-year fourth quarter revenue decrease to $1.19 billion.

[...]

The EDD division's quarterly loss overall was $130 million, slightly decreased compared to a $171 million loss in the same quarter, a year prior.

The phones/smartphones market is pretty much the same for Microsoft. For a long time it has operated at a loss and things are getting worse.

Microsoft losing mobile OS ground

It's been able to spruce up its image a bit with targeted ads, but Microsoft has kept mobile operating systems out of its sights and is losing market share. Analysts predict that trend is likely to continue.

If the future is mobile, then Microsoft is in serious trouble here. It remains to be seen what comes out of the Danger acquisition. As we have been showing in daily links in recent days, HTC, Garmin-Asus and Sony-Ericsson increasingly abandon Windows mobile in favour of Android (Linux).

Linux is growing rapidly. Just because it's not in the news doesn't mean it's not happening. ⬆

"Gates is trying to make sure that he has a proprietary position in controlling the tools that allow you and me to access information. And that's profitable by definition. How would you like to own the printing press?"

--PaineWebber Media Analyst Christopher Dixon