An Associated Press article has reported that Sony posted profits of $127 million thanks to increasing sales of its PlayStation 2 and electronics products. Sony posted losses of $295 million for the same quarter last year due to the costs incurred while launching the PlayStation 2. Sony expects its profits to continue to rise as more PlayStation 2 units enter the retail chain and software sales rise.

　　Teruhisa Tokunaka, Sony executive deputy president, is optimistic that Sony's games business will continue to operate at a profit. "The year 2000 was the year of electronics. The big change in the year ahead is that the game business will start making profits,'' he stated.

　　Over the past year, Sony's net profits fell 86 percent to $135 million from $976 million in the prior year. Sony has attributed the decline to the learning curve associated with game developers coming to grips with the sophisticated architecture of the PlayStation 2. Sales for the first quarter of 2001 totaled $15 billion, an increase of 16.5 percent over the $14 billion in sales from the first quarter of 2000.

　　Sony also stated that its movies division endured $228 million in losses this quarter thanks to an accounting change that requires movie producers to immediately report marketing and advertising costs.

　　While the US economy has slowed down significantly, Sony has seen no drop in demand for its products. Electronic sales were up 21 percent for the year. Sony has now sold 10.6 million PlayStation 2 consoles worldwide and 2.7 million PlayStation 2 consoles in the US. Sony predicts that it will generate $1.2 billion in profits by March of 2002.