Losses on the PlayStation 3 could exceed $2 billion by for the fiscal year ending in March. This is more than Sony initially expected.
Executives told reporters and analysts in Tokyo today that they blamed a shortfall in sales of the costly PlayStation 3 video games console and the PlayStation Portable (PSP).
Sony's net profit fell more than five per cent to $1.3bn in the last three months of 2006. The games division suffered an operating loss of $455m during the quarter, a fall of almost $1bn from the previous quarter, according to Sony.
"This deterioration was primarily the result of the loss arising from the sale of the PS3 at strategic price points, as well as other charges associated with preparation for the launch of the PS3 platform," the company announced.
"In addition, operating income from the PS2 and PSP businesses fell due to sales declines."