Sony's PlayStation division has reported an 800m operating loss (5m) for the quarter ending September.
In the same period last year it saw operating income of 2.3bn (14.6m), a disparity Sony blamed on hardware price reductions and exchange rate fluctuations.
PlayStation revenues for the period grew five per cent year-on-year to 156bn (991m) thanks to increased PS3 sales, which helped to offset declines in other hardware.
Said Sony: "In the game segment, operating loss significantly increased year-on-year primarily due to an increase in research and development expenses related to the upcoming introduction of the PlayStation 4 and the impact of a strategic price reduction for the PS Vita."
Sony's overall numbers saw operating revenue jump 11 per cent to 1,776bn (11.3bn). Full year profit forecasts have been cut from 50bn (318m) to 30bn (190m).