First, the new format mixes very different products into the same subcategories, complicating efforts to single out how a particular product performed. Second, the new format also splinters the results of certain key products like Windows and Office into several subcategories, making it hard to get a unified view of their sales.
Indeed, in the press release Microsoft issued to announce the first-quarter results, the company didn't provide enough granular data in it for investors, customers, analysts and other interested parties to get a clear view of how many of its products did during the period.
However, during the earnings conference call and in complementary tables and materials, Microsoft offered deeper looks at how specific products and product lines fared.
Xbox unit sales fell by about 500,000 year on year to 1.2 million, but Microsoft has high hopes for strong holiday season sales for the gaming console's new Xbox One model, scheduled to launch in late November. Revenue from the Xbox Live online multiplayer platform grew more than 25 percent.
Sales to OEMs (original equipment manufacturers), such as HP, Dell and Lenovo, of Windows Pro, the version of the PC and tablet OS for businesses, grew 6 percent. However, sales to OEMs of the consumer versions of Windows fell 22 percent, hurt in part by China. Windows sales via volume licensing to businesses were up 6 percent. In the case of Windows Phone, the OS version for smartphones, revenue increased $102 million, a figure that includes a rise in patent licensing revenue.
CFO Amy Hood said during the call that the results for the Windows business were better than expected. For example, instead of the actual 7 percent drop in total Windows OEM revenue, Microsoft had anticipated a fall in the "mid-teens," she said. A positive factor for Windows was a PC market that was more stable than expected, especially business purchases, she said.
The company has high expectations for Windows 8.1, the recently released update of the PC and tablet OS designed to address a host of complaints that have hurt adoption of Windows 8, launched a year ago. New, better Windows 8.1 PCs and tablets are arriving at a variety of prices, sizes and configurations, and could yield strong Windows sales during the holidays.
Microsoft's own Surface tablet is doing better after a poor start, specifically the Surface RT, for which Microsoft was forced to take a $900 million charge in the previous quarter. Surface units sold during the first quarter "more than doubled" compared with the fourth quarter and "Surface RT did better than expected," she said.
Sales of the Office suite to consumers dropped 23 percent, due in part to lower consumer demand and to cannibalization from Office 365 Home Premium, the version of the suite that's sold on an annual subscription basis, as opposed to via traditional perpetual -- buy once, own forever -- licenses. There are now more than 2 million Office 365 Home Premium subscribers. Sales of the suite to businesses grew 11 percent.
Hood attributed the strong growth in search advertising -- a market where Microsoft competes against Google's search business -- to improvements in Bing's algorithms and its ability to monetize queries. Total online advertising revenue, which also includes other ad formats like display ads, grew 13 percent. Display ad revenue dropped 31 percent, mostly due to the new Outlook.com webmail service, which apparently hasn't been able to retain the ad volume of its Hotmail predecessor.
Paid seats of Office 365 -- a cloud email and collaboration suite that includes cloud versions of Exchange, Lync, SharePoint and Office -- increased by 135 percent.