Sony's fourth quarter financial results highlight the losses which have hit the company thanks to its gaming business in light of the increase in sales seen its other divisions for the past fiscal year. Sales for its electronic products including Bravia LCD TVs and Cyber-shot digital cameras increased by 16.9 percent, while revenue for its motion picture division rose by 29.5 percent thanks to high profile releases like Casino Royale.

Unfortunately, the company's games division did not fare as well. Thanks to the costs associated with the PlayStation 3 console, Sony Computer Entertainment posted a $1.93 billion USD operating loss, a little under the $2.03 billion USD predicted by analysts earlier this week. Despite this, Sony expects its games division to recover from the slump for the current fiscal year (ending March 2008). The company expectes PS3 production costs to reduce, which would likewise contribute to a healthy reduction in operating losses.

As was expected, the game division took a beating. Operating loss came in at 232.3 billion yen ($1.97 million) compared to an operating profit of 8.7 billion yen in the last fiscal year. Sales in the game unit were up 6.1 percent to 1.02 trillion yen ($8.6 billion). Sony attributed the game unit's performance to "the result of the loss arising from the sale of PS3 at strategic price points lower than its production cost during the introductory period, as well as the recording of other charges in association with the preparation for the launch of the PS3 platform." The company also noted that overall software sales declined because of lower PS2 sales. Sony was able to increase operating income related to the PSP, however, due to "continued cost reductions in hardware production."


During the current fiscal year ending next March, Sony is expecting a major improvement for the PS3. "An increase in sales is anticipated as a result of the full-scale expansion of the PS3 business in Japan, the United States and Europe. In addition, a significant reduction in operating loss is expected due to rapid reductions in hardware production costs and an enhanced line-up of software titles in the PS3 business," the company stated.

Wolfwood via biz.gamedaily.com »