Although Sony managed to significantly reduce its overall losses during the third fiscal quarter, its video game business is still looking worse for wear, with forecasted PS Vita sales in particular once again slashed.It was mainly a reduction in television losses, coupled with stronger movie sales, that pushed Sony closer to profitable territories -- in comparison, Sony's Game division suffered a drop in both sales and profits during the quarter ended December 31, 2012.The company put this down to "the slow penetration of the PlayStation Vita," adding that it recognized the poor sales of the device as a "particularly important issue."As a result, it now estimates that the PS Vita and the PSP together will sell 7.0 million units during the fiscal year ended March 31, 2013.This forecast has been cut multiple times over the last year -- originally Sony estimated it would sell 16 million Vitas and PSPs during this fiscal year. This was then cut down to 12 million, and then once again slashed in November to 10 million In comparison, Sony's PlayStation 3 also saw declining sales during this quarter, with PS3 and PS2 hardware sales down to 6.8 million compared to 7.4 million year-over-year, and software sales down to 61.7 million compared to 68.7 million year-over-year.Sony's plan to bring its game business back into play involves providing users with a more attractive video game software lineup, as well as offering more games through mobile devices.For the quarter ended ended March 31, 2012, Sony's Game division saw revenue of 268.5 billion yen ($2.9 billion), down 15.1 percent year-over-year, and operating income of 4.6 billion yen ($49.1 million), down from 33.8 billion yen ($360.1 million).Overall, the company posted revenues of 1.9 trillion yen ($20.8 billion), up 6.9 percent year-over-year, and losses of 10.8 billion yen ($115.3 million), improved significantly compared to losses of 159.0 billion ($1.7 billion) year-over-year.