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(Pocket-lint) - Sony will post a loss of $1.26 billion (£750 million) in its financial year ending March 2014. Its income for the year dropped by over $2 billion year-on-year, 89.4 per cent, even though the PlayStation 4 and Xperia phone line-up helped the company increase sales in the year.

The game division increased sales by 38.5 per cent year-on-year, mainly thanks to an incredible launch for the PS4 and the seven million , and its mobile products and communications division grew in sales by 29.6 per cent.

Even its home entertainment and sound division, which has been hit in previous years by the decline in sales of flatscreen TVs, saw a rise in overall sales, by 17.5 per cent. But streamlining and restructuring the firm over the last year have proven costly. Very costly indeed. And it forecasts that this process will continue into the next financial year as well.

It's a process that has also included the sale of its Vaio PC division, the company's New York headquarters, the closure of the eBook Reader Store, and announcement that senior executives will not receive bonuses for a third consecutive year.

It also expects to lose a further half-a-billion dollars in FY14, but after that all the necessary changes will have been put in place. And with the rising sales in most departments, most significantly with its smartphones and the PS4, this current hit should set Sony in good stead going forward.

Writing by Rik Henderson. Originally published on 14 May 2014.