PS3 hurts Sony profits, but less than expected

Yesterday's Bloomberg prediction that the PS3 would drag down Sony profits 50 percent turned out to be a little lofty. While the company's games division did show a withering 54.2 billion yen (about $446 million) loss for the quarter ending Dec. 31 (down from a 67.8 billion yen/$558 million profit in 2005), strong sales of Bravia TVs and other Sony electronics meant the company as a whole showed only a modest five percent decrease in profits for the quarter, year over year.

Sony blamed the weak game unit performance on the massive costs associated with rolling out the PS3 and selling it at a substantial loss. Slowing sales for the PSP also hurt the bottom line, Sony said. Despite the bad news, the company actually raised their profit forecast for the fiscal year ending March 31. Still, unless Sony can find another quick-selling "champion product" along the lines of the PS2, Sony's bottom line may be continuing in this same direction for a while.

This article was originally published on Joystiq.