Sony Pictures Entertainment is looking to sell at least 50% of its low-margin digital production unit and its 5-year-old animation division, studio officials confirmed Wednesday.

Sony Pictures Imageworks has produced computer-generated effects and 3-D animation for the Culver City studio's movies and those of rivals for 15 years. But the unit's profit is "much below" SPE's target of 10%, said a Sony executive who asked not to be named because discussions with potential investors are preliminary.

"The business is labor-intensive and has become highly competitive," explained the source, noting that advances in digital technology have made it possible for smaller shops to compete with larger effects houses such as Imageworks, which employs more than 800 people.

Sony has been approached by private investors and video game companies that believe the firm could be more profitable if it added new customers such as producers of computer games and TV commercials.

Sony has not been able to break into those markets on its own.

As reported Wednesday by the New York Times, Sony has retained an investment-banking firm to attract investors and assess the value of Imageworks and Sony's animation division, which so far has produced two films. "Surf's Up," released this year, was a box-office disappointment, and last fall's "Open Season" became a modest hit thanks to DVD sales.

An infusion of capital from an equity investor would help Sony co-finance its annual slate of animated movies, which includes "Cloudy With a Chance of Meatballs," due out in spring 2009, and "Hotel Transylvania," scheduled for release in 2010. The unit has no movies scheduled for release next year.

Sony Pictures issued a statement Wednesday confirming its exploration of equity partnerships and stressing its "strong commitment to making animated movies going forward."

Imageworks most recently produced visual effects for such upcoming releases as Paramount Pictures' "Beowulf," and Warner Bros.' "I Am Legend" as well as Sony's planned 2008 release "Hancock," starring Will Smith.