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Sony profits slashed by PS3 price cuts

PlayStation 3 reduction hits electronics giant

Sony was hit by an an overall profit decline of just over 5 percent in the last quarter of 2006, despite its core electronics business enjoying a revival. The decline was due to price cuts to its PlayStation 3 game console, the company said today.

Sony said sales and operating revenue increased 9.8 percent to ¥2.6tr ($21.4bn) while net profit fell 5.3 percent to ¥159.9bn.

Sony Computer Entertainment, the division responsible for its PlayStation gaming consoles, was the only one of Sony's main business units that registered a loss in the quarter. It lost ¥54.2bn primarily due to the retail price of the more expensive of the two consoles being reduced from a planned ¥62,790 to ¥49,980 in Japan. The cut was made, Sony said, due to negative feedback from consumers.

Sony's electronics business saw profits more than double to ¥177.4bn on 16.9 percent higher sales of ¥1.9tr, the company said.


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