Lower PS3 prices weigh on Sony

TOKYO (Reuters) -- Sony Corp. posted a loss for the fourth consecutive quarter, hit by sluggish cellphone sales and as it cut prices of its PlayStation 3 game gear, but trimmed its full-year loss forecast close to market expectations.

Sony's mobile phone joint venture with Sweden's Ericsson saw its sales tumble and losses balloon as it has lacked a strong smartphone offering to rival Apple Inc.'s (AAPL, Fortune 500) iPhone and Research in Motion's (RIM) Blackberry.

In its game operations, the Tokyo-based electronics and entertainment conglomerate launched a cheaper version of the PS3 last month to better compete with Microsoft Corp.'s (MSFT, Fortune 500) Xbox 360 and Nintendo Co.'s (NTDOF) Wii.

The move put pressure on Sony's (SNE) profitability, but spurred console sales ahead of the key holiday season, brightening long-term prospects of the struggling game operation at a time when Nintendo's top-selling Wii console is losing steam.

Sony cut its operating loss forecast to ¥60 billion from ¥110 billion for the year to March, compared with a ¥227.78 billion loss a year earlier, and smaller than the consensus of a ¥68.8 billion loss in a poll of 21 analysts by Thomson Reuters.

Sony is the world's second-largest LCD TV maker behind Samsung Electronics Co., but the third-ranked LG Electronics Inc has recently been gaining on it.

In July-September, Sony's operating loss was ¥32.6 billion, compared with a ¥11.05 billion profit a year earlier and beating the consensus estimate of a ¥59.2 billion loss.

Shares in Sony closed up 2.8% ahead of the results, outperforming a 2.1% rise in the local electrical machinery index.

Sony shares gained 41% since the start of the year through Thursday, while the subindex put on 28%.