After confirming job cuts and announcing profit dips, it's no surprise that Microsoft feels they are hurting financially. The companys Entertainment and Devices Division is still making a profit, though, so at least some of their ventures must be doing well. Apparently thats not the case with the Zune platform, which saw revenue drop $100 million, or 54 percent compared to the same quarter last year due to lackluster sales.
That's a significant drop, cutting Zune revenue nearly in half. A lowered demand for media players is an easy culprit to point a finger at, but Microsoft's biggest competitor, Apple, suffered no such loss. Instead, Apple has actually managed to grow iPod sales as much as three percent. Clearly, the Zune is not performing as well as Microsoft wants. They're vested in the mp3 market too far at this point to back out, so what will Microsoft's plan be to repair Zune sales?