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COMPUTER giant Microsoft recorded a fall in profits last year despite high revenue.

The US technology group, which has a significant base in Ireland, made $6.63bn (€4.8bn) in net profit.

But the group said its revenues of $19.95bn (€14.55bn) were boosted by demand for Kinect controllers.

Microsoft chief financial officer Peter Klein said that they were enthusiastic about the consumer response to their holiday lineup of products.

"The pace of business spending, combined with strong consumer demand, led to another quarter of operating margin expansion and solid earnings per share growth," he said.

A 55pc growth in revenue at Microsoft's entertainment and devices division was credited with boosting the amount of money the company took in during the quarter.

Microsoft said that its shift to offering software as services in the Internet 'cloud' continued to gain momentum in the quarter, with film studio Pixar Animation being among the companies using its Azure platform.