Report: Sony expecting twofold full-year game losses

Sony has said in an interview with Reuters that its electronics division will beat its target operating margin for Sony's financial year to March 2008, but the company is now expecting its video game division to record double the loss initially forecast.

Console manufacturers such as Sony generally make a loss on their consoles, which cost more to produce than they recoup in the sale price, and make the money back selling software for the platform over the unit's lifetime. Manufacturing the PlayStation 3 is estimated to have cost the company ¥100 billion (approx $870 million).

Sony is expecting a larger full-year loss than it had previously forecast in the video games division after reporting on Thursday that it was aiming for break even in the second half of its financial year, after a loss of ¥126 billion ($1 billion) in the first half.

However, the electronics division, buoyed by LCD TVs, is likely to exceed targets of a 4 percent operating margin by one percentage point. It also raised its general full-year forecast, sending it shares upward when the market opened.