The Windows and Windows Live group posted sales of $3.2 billion during the three months ending Sept. 30, a drop of 33% from the same period the year before.

Revenue was reduced by the $1.2 billion that Microsoft deferred to cover sales of Windows 8 to computer makers preparing their new hardware for launch next week, and for a deal that debuted off in June which promises buyers of new Windows 7 PCs a $14.99 upgrade to Windows 8.

Even without those deferrals, the Windows division would still have posted a 9% downturn compared to the third quarter of 2011.

As it has for several quarters, Microsoft again blamed poor PC sales for the weak Windows numbers.

Peter Klein, Microsoft CFO, called the PC market "challenged" Thursday during the company's earnings call with Wall Street analysts. "In addition to a tough economic environment and competitive pressures, OEMs drew down their Windows 7 inventory as they began the transition to Windows 8," Klein said.