Last week, Nintendo was all over the news, revealing that its underperforming Wii console had forced the company to take a monetary loss of approximately 35 billion Yen during 2013. But not everyone is struggling in the video game industry. In fact, Microsoft is enjoying such a fruitful period with its Xbox One console that the company is doing better than anyone thought.

According to a report published by the Inquirer, the Washington-based software giant recorded record revenue for the second quarter of the fiscal year, notching an impressive $24.52 billion in revenue and a still-sizable $6.56 billion in overall profits. What’s the secret behind Microsoft’s strong earnings quarter? Why, the Xbox of course! Since the company unveiled its latest gaming console on November 22, the Xbox One has sold 3.9 million units. That’s a strong enough number by itself, but Microsoft’s revenues were pushed over the edge by the Xbox 360. The older console, which received some liberal price cuts in the wake of the Xbox One’s release, accounted for 3.5 million sales on its own.

Still, simply selling units doesn’t necessarily mean earnings. Microsoft’s Xbox One – like Sony’s competing Playstation 4 – costs so much in parts and manufacturing charges that Microsoft only makes a small margin of profit from it. Add in years of research and development costs, and Microsoft is technically selling the Xbox One at a loss. However, the fact that the console is moving units and establishing a user base is nothing but good news for Microsoft: even if the company doesn’t make a ton of money from the gaming hardware, it still skims enough royalties off of game title purchases to make a veritable fortune from its console empire.

The Xbox One wasn’t the only Microsoft product leading revenue growth, either. The company’s current flagship tablet devices, the Surface 2 and the Surface Pro 2, must have sold considerably better than Microsoft’s previous forays into the tablet market: Surface tablets as a whole more than doubled from the previous quarter, collecting Microsoft a nice banknote of $893 million.

However, not everything is sunshine and roses for Microsoft. Software sales were down slightly compared to the company’s previous quarter, a sign that the PC market that Microsoft once built its empire on is fading. In fact, Microsoft had better luck selling its iconic Windows operating systems on phones than it did on computers. The company reported that its Windows Phone revenues had jumped 50 percent during the quarter, buoyed along by strong holiday sales. Microsoft’s durable Office suite also enjoyed a solid quarter of sales.