"Despite an expected decrease in game segment sales as a result of a decline in sales for the PlayStation 2 business, the game segment as a whole is expected to have positive operating income for the fiscal year ending March 31, 2009 as the profitability of the segment will improve significantly due to hardware cost reductions and an enhanced line-up of software titles in the PS3 business," the company said in a statement Wednesday.

Sony reported that fiscal year 2007 PlayStation division sales rose 26.3 percent to 1.284 trillion yen, narrowing the unit’s losses from 232.3 billion yen the year prior to 124.5 billion. The company attributed the fall in losses primarily to the reduction of PS3 hardware production costs, as well as increased PS3 software sales and PSP hardware sales.

During the year ended March 31, Sony sold 9.24 million PS3s globally, 13.89 million PSPs and 13.73 million PS2s. On the software front, 57.9 million PS3 games were sold, as were 55.5 million PSP titles and 154 million PS2 games.