Net income for the three months to 31 December was at $6.63bn (£4.15bn), down from $6.66bn (£4.16bn) in the same period in 2009. Revenue increased slightly to £19.9bn (£12.48bn) up from $19bn (£11.88bn).
The Windows operating system runs on 90% of the world’s computers and is heavily dependent on global PC sales which grew just 3% in the quarter as consumers move to tablets and Apple hardware.
Sales in the Windows division fell 30% to $5.05m (£3.16m) as a consequence and partly due to the launch of Windows 7 in the same quarter in 2009.
However, its entertainment and devices division reported a 55% growth in revenue as sales of the Kinect sensor boosted sales of Xbox 360 consoles and games.
Chief financial officer Peter Klein says: “We are enthusiastic about the consumer response to our holiday line-up of products, including the launch of Kinect.
“The 8 million units of Kinect sensors sold in just 60 days far exceeded our expectations.”
Its business division, which sells software such as the latest version Microsoft Office, reported a 24% rise in sales to $6.03bn (£3.77m).
Its online services division which includes search engine Bing reported an operating income loss of $543m (£339.57). Last year Bing partnered with Yahoo! to form a search alliance in a bid to gain ground on Google and now all Yahoo! searches and advertising are powered by Microsoft.