Microsoft's Entertainment and Devices division, which includes the Xbox, Zune and Windows Phone 7 businesses, has reported an operating profit of $382 million (239m) for its first financial quarter, up 46 per cent on the same period last year.

Revenues were up 27 per cent to $1.79 billion (1.1bn) as the company shipped 2.8 million Xbox 360 units, up 38 per cent from the 2.1 million shipped in the first quarter of the 2010 financial year.

Halo Reach, the latest in the best-selling shooter franchise, has generated revenues of $350 million (219m) since launch, said Microsoft.

The entire Microsoft business reported record first quarter results for the period ended September 30, with revenues up 25 per cent to $16.20 billion (10.1bn). Profit was $5.41 billion (3.3bn) and operating income $7.12 billion ($4.4bn).

"This was an exceptional quarter, combining solid enterprise growth and continued strong consumer demand for Office 2010, Windows 7, and Xbox 360 consoles and games," commented Peter Klein, chief financial officer at Microsoft.

"Our ability to grow revenue while continuing to control costs allowed us to deliver another quarter of year-over-year margin expansion."