Sony has posted a 68% fall in operating profits for the financial year primarily due to large losses in its games division. It also reported its largest quarterly losses in four years.
Sony announced operating profit of 71.75 billion yen ($596.8 million) for the year ended March 31, down from 226.42 billion yen ($1.88 billion) a year earlier.
The poor financial results stem mainly from the huge costs associated with the launch of the PlayStation 3, and specifically the company's decision to sell the console at a large loss per unit. According to Sony's annual report, "In the Game segment, there was a significant operating loss as a result of the sale of PS3 at strategic price points lower than its production cost during the introductory period." Sales of the console have not been overwhelming either - it has been outsold by Nintendo's Wii by two to one since its release in November 2006.