PS3 troubles

Problems with the company's next generation games console - designed to compete with Microsoft's Xbox 360 and Nintendo's Wii - caused its launch to be delayed.

Despite Sony cutting the price of the PS3 in the US, sales of the system still significantly trail Nintendo's Wii machine. Sony's games division saw losses widen to 29.2bn yen.

Sony said it aimed to increase shipments of the PS3 to 11 million units by 2008. On Wednesday, Nintendo upgraded sales forecasts of its Wii console to 16.5 million machines for the year to March 2008, up from a previous forecast of 14 million.

Elsewhere, performance was strong in Sony's electronics division, which benefited from strong demand for Handycam video cameras and Bravia liquid crystal display (LCD) television sets.

With sales of conventional TV sets in decline, Sony faces a tough battle to win a share of the flat-panel market against LCD TV market leader Samsung Electronics.

Sony maintained its operating profit forecast for the year to March 2008 of 440bn yen. This is up sharply from 71.75bn yen in the 2006/07 financial year when it was hit by costs relating to the delayed launch of the PS3 and a recall of faulty laptop PC batteries.