Sony Corporation has announced its results for the financial year ending March 31 2008, with revenues and profits rising on the back of some growth and the selling off of capital assets.

The gaming division has some interesting news, with a sales increase of 26.3 percent to JPY 1.28 trillion ($12.2 billion), resulting in a narrowing of its loss from JPY 232.3 billion ($2.21 billion) to JPY 124.5 billion ($1.18 billion). The reduction in the loss is due to the lowering cost of manufacturing the PlayStation 3 and increased sales of the PlayStation Portable.

"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," Sony said in its financial results.

Europe has become the largest single market for the video game business, with sales and operating income in Japan falling by 3.4 percent to JPY 2.06 trillion ($19.6 billion), and North America falling 0.5 per cent to JPY 2.22 trillion ($21.1 billion). This was offset by a rise of 14 percent in Europe to JPY 2.33 trillion ($22.1 billion), and 19.3 percent in the rest of the world to JPY 2.27 trillion ($21.6 billion).

Overall Sony Corporation took JPY 8.87 trillion ($84.4 billion), a rise of 6.9 percent on the previous year, with a net income of JPY 369.4 billion ($3.51 billion), nearly tripling the previous year’s total of JPY 126.3 ($1.20 billion).

A lot of this increase was one-time, related to the selling off of assets and the floating of Sony’s financial business last year.

The electronics division showed the strongest individual results, with Sony Bravia TV’s and CyberShot cameras providing a large boost in revenue.

Sales performance for the next year is expected to see revenues rise by 1 percent to JPY 9 trillion ($85.6 billion), though the company forecasts a 22 percent fall in profits to JPY 290 billion ($2.76 billion) thanks to the expected appreciation of the Yen against the Dollar. This is a problem being faced by all Japanese companies operating mainly overseas, and Nintendo is suffering the same problem.