Why reports of the decline of the PS3 have been grossly exaggerated.

[Squilliam]

NJ5 said:

Squilliam said:

NJ5 said:
@Squilliam: I highly doubt that those potential cost savings in hardware production will compensate for the 15-30% drop in American/European currencies and drops in PS2 hardware and software sales.

http://www.metalprices.com/FreeSite/metals/cu/cu.asp

Coppers down.

http://www.metalprices.com/FreeSite/metals/cl/cl.asp

Oils down.

http://www.metalprices.com/FreeSite/metals/al/al.asp

Aluminium is down.

http://www.metalprices.com/FreeSite/metals/ng/ng.asp

Natural gas is down.

In all cases the difference is larger than the currency fluxuations.

Then why would a company like Panasonic forecast negative profits due to the currency problem and economic slowdown? Hardware production costs a lot more than the raw materials.

 

A large part of it is this: The built the TVs/Stereos etc at the high commodity prices and now they've built up an inventory which was expensive to manufacture comparitively and must now sell them with a lower revenue per unit and at a lower rate due to economic conditions.