Playstation 3 Launch Cuts Into Sony Profits

Sony has reported a large fall in operating profits, mostly due to the launch of their hugely expensive and money-losing Playstation 3 game console. The consoles are sold to the public at less than production cost with the hope that the company will make that money back through software sales.

The cost of launching the PS3 console contributed to a 68% drop in operating profits to 71.8bn yen ($597m; £300m) for the year to 31 March.

The PS3 is up against tough competition from the Microsoft Xbox 360 and Nintendo Wii.

But Sony forecast a strong recovery in profits during the coming year.

Read more on the BBC.