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The company said it was also facing difficulty because of the strength of the yen. This decrease came in the crucial October to December period, which usually provides more than 50 percent of the company's total profits.
The results were slightly better than analysts' expectations of a 15 percent to 27 percent fall.
While overall sales were up 10 percent to YEN110.4 billion (USD18.4 billion), the company has been forced to halve its full year net profit forecast to USD42.6 million for the year to March. Operating profits are expected to increase 8 percent.
Sony's game division posted an operating loss of YEN13.93 billion for the quarter, down from a profit of YEN57.54 billion a year earlier.
"The game unit's losses will expand in the fourth quarter, but should bottom out before March," said Sony executive deputy president and chief financial officer Teruhisa Tokunaka.
The group cuts its sales forecast for PlayStation 2, with shipments for the current financial year being cut to 9 million from 10 million. The company cited slower than expected software sales and production problems as the root cause.
He predicted profits for the unit by the middle of the next business year.
Since the March launch of the latest version of PlayStation, Sony's shares have fallen around 45 percent.
Tokunaka said the growth of demand for personal computers, mobile phones and devices particularly in the US and Europe was expected to experience a major reduction.
Sony's group net profit declined 23 percent year on year to YEN72.74 billion in the third quarter.
Tokunaka blamed the decline in net profits for the full year to heavy losses at Aiwa, an electronics subsidiary of which Sony own 50.5 percent.
However, Sony's electronics division put in a strong performance with operating profits increasing by 53 percent. Profits at its music division rose 8 percent but the company's struggling movie business posted a 70 percent drop in profits to YEN2.33 billion.
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