The Redmond company reported a 10.9% drop in net income ($4.3 billion) for the first three months of the year, with earnings per diluted share falling 3 cents. Aside from the Vista not so successful launch, one of the main causes of the slip was the legal fight with the European Union.

As you may know, the outcome of the Microsoft-EU battle was that the latter slapped the Redmond company with anti-trust fine of $1.42 billion.

Microsoft’s champion in terms of sales was the entertainment and devices division, with Xbox 360 sales up 67% and a revenue of $1.6 billion.

Next in line come the PC client business (revenue up 16%), server and tools (up 18%). The business division comes with less than good news, as it took a dive of 9%.

But the worse news for Microsoft was that OEM license revenue was down 24% to $4 billon. PC makers seem to have become reluctant to buy new Vista licenses, as consumers proved to be unwilling to adopt the new OS.