Sony Games posted a 26% increase in sales over last year, but still lost money. The losses, however, were greatly reduced from last year seeing a decrease from $2.21 billion to $1.18 billion.
Sony as a whole, however, posted a profit of $3.51 billion so the Games Division's losses aren't an issue. Remember, Microsoft lost money on the Xbox every year it was available and only recently began making money on the Xbox 360.
PS3 hardware and software sales have risen and Sony has managed to cut some of the production costs. They are positive about the future of Sony Games.
Gamasutra: Sony Games Division Sees 26% Sales Jump