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Sony Computer Entertainment which sells the most expensive gaming console in the market is forecasting losses close to $1 billion dollars by March 2008. This is double its initial forecast.

Operating loss at Sony’s gaming unit for the full financial year ending March 2008 is now expected to exceed 100 billion yen ($876 million), compared to 50 billion yen initially forecast, reports Reuters.

A main driver of losses is Sony’s PlayStation 3 which sells in Australia for $995 and $695. Pricing the console at a lower point than its production cost has set the company back millions, Sony said last Thursday, as it posted a gaming unit operating loss of 96.7 billion yen ($847.6 million) for the quarter ended in September.

Last fiscal year, Sony’s game division took a beating thanks to the PS3. Operating losses totaled almost $2 billion. As PS3 chips and components get reduced in size and become easier to mass produce, costs will come down. Sony said last week that it’s aiming to at least break even on the game division for the second half of the current fiscal year.

However, a spokesmen also said that Sony’s operating profit margin for its wider electronics operations is likely to reach 5 percent in the year to March 2008, a greater margin than previously forecast, and one aided by brisk sales of the company’s LCD television, camera and camcorder ranges.

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