Sony Corporation has said that it expects to record a net loss of JPY 150 billion (USD 1.68 billion / EUR 1.29 billion) for the financial year ending March 2009.
The company's PlayStation games division is expected to increase losses by approximately JPY 30 billion (USD 337 million / EUR 258 million) in the financial year, half of which is due to lower than expected sales.
For the fiscal year ended March 2008, the company made a profit of JPY 369.4 billion.
The company has primarily been affected by the economic slowdown and the strength of the yen making exports expensive.
The new forecast contrasts sharply with the previous guidance set in October last year, when Sony said that it expected to make a profit for the fiscal year of JPY 150 billion.
The company's other business segments fared no better. Sony's electronics division is expected to see losses grow JPY 340 billion, while Sony Pictures is anticipating an increase in loss of JPY 13 billion.
Sony's financial services division, which includes Sony Life Assurance, is expected to lose JPY 65 billion compared to previous forecasts, and all other business a further JPY 11 billion.
Update: Sony has revealed plans to cut costs at the business by JPY 250 billion, including the closure of one of its manufacturing sites in Japan, further consolidation of divisions and cuts to bonuses and salaries.