Strong sales of Bravia flat-screen TVs and Cybershot digital cameras helped Sony to offset widening losses at its struggling games division, home of the PlayStation 3, and double first-quarter net profits, the Japanese group said today.

The travails of the PS3, which ran badly over budget and has failed to match the appeal of Nintendo’s rival Wii console, clouded otherwise solid results. Operating losses at the Games unit widened to ¥29.2 billion (£120 million), from ¥26.8 billion a year earlier.

Industry estimates suggest each PS3 console is being sold at a $200 loss, while the Wii is already turning a profit on each unit shipped.

Sony said that it shipped 710,000 PS3 game consoles in the quarter, less than a quarter of the 3.43 million Wii consoles sold by Nintendo in the same period.

At Sony, group net profits came in at ¥66.46 billion yen (£269 million), up from ¥32.3 billion yen in the same period a year earlier. Operating revenues were up 13 per cent, at ¥2 trillion. Operating income trebled, hitting ¥3.3 billion.

Sales at Sony’s core electronics division climbed 11.6 per cent, to ¥1.42 trillion, on demand for LCD TVs and digital cameras. Operating income at the unit was up more than 77 per cent, at ¥84.1 billion.

Yesterday, Nintendo revealed a five-fold surge in first-quarter net profits, further vindicating the Japanese group’s declared policy of making video games for “people who don’t like video games”. The company reported net earnings of ¥80.25 billion (£326 million) in the three months to June, up from ¥15.55 billion last time.

Nobuyuki Oneda, Sony’s chief financial officer, admitted that the PS3’s performance fell short of expectations but said that Sony hopes that a $100 price cut to 60-gigabyte model in the US – before the unit is phased out to effectively be replaced by an 80-gigabyte model – would boost demand. “Thanks to these measures, PS3 sales are picking up pace,” he said.

Meanwhile, Sony’s Hollywood studio posted an operating income of ¥3.3 billion, versus a loss of ¥1.2 billion a year before, boosted by a strong performances from Casino Royale, the latest James Bond film, and Spiderman 3.

Sony stuck to its operating profit forecast of ¥440 billion yen for the year to March 2008, up sharply from ¥71.75 billion a year earlier.

Shares in the company closed 1.1 per cent higher in Japan, at ¥6,350, ahead of the release of the first-quarter numbers.

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