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Forums - Sales Discussion - Relief for Ninty and Sony? Improving exchange rates (update)

kowenicki said:

Keeps going down....

Yen/Euro now 98.39

Catastrophic rate for Japanese exports.

That is about 7 below Sony expectation and 8 below Nintendo expectations for the remainder of their fiscal year.

...as a reminder:

Sony loses about 6 billion yen of annual operating profit, or sales minus the cost of goods sold and administrative expenses, for every 1 yen decline against the euro.


so 42b~ (roughly) loss for Sony due to it falling 7? wow 0_o



 

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Wow, the Euro is taking a beating because of all the bs going on there. I knew it was kind of bad but I didn't think it was that bad. I assume the dollar is holding semi steady. If only we would elect Ron Paul then our dollar would actually be worth something again.



damn.. really sucks... most of the time I import my games... the weak euro isn't helping.. :(
I better stock up on some games before it falls even further down...



 

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kowenicki said:
Aprisaiden said:

If these numbers persist then alot of Japanese exportors are going to be in trouble, personally i am amazed that we haven't seen the Japanese government intervene properly (i know they have thrown some money into the market a few times, but what they need to do is really find some way of making there own exportors more competive before major companies begin to collapse)


there isnt a lot more they can do... they have pumped massive amounts in to weaken the yen.... isnt working.


so wait, japan has managed to print more yen without any weakening basically creating wealth out of thin air?  i'm not particularly well versed in ecomonics but how is this not a viable solution to keep exporters a float.  :P



That makes me wonder how much the Euro can fall...
I remember 3 years ago when it was near 170 Yen for 1 Euro. Good times... (because I had savings in Euro)



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Here's the problem (especially with the argument at the beginning of the thread). Exports hurt because of the weaken Euro. (aka They don't make as much with each unit sold) They (Nintendo/Sony) are hurting because of the strong Yen. While they may be able to repatriate money from the EU at a better rate, they are now loosing money on the falling Euro. The "best" situation would be if the Yen fell which isn't happening.



Interesting to finally see things going Ninty/Sony's way ... wonder if it'll keep up.



 

It was pretty inevitable that the currency rates will come little more reasonable levels as economy in major Euro countries is improving a little while in Japan many major companies have posted big losses and economy actually shrank during last quarter. I think this will continue all year. Don't know where it stops though. Last summer euro was 114 yens and even that was historically pretty weak.



Sony can't rely on exchange rate, it's dangerous. What they can do is what they are currently doing, although reluctantly, outsourcing some components, like they did with some LCD displays, and offshoring more plants, as foreign demand is stronger than the internal one, and exporting from Japan is still viable only for some high-end products, and only if all the main competitors are Japanes too, middle and value range can't be both competitive and profitable when the yen is too high.



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This kind of makes me wonder how the pricing of consoles and software in the Eurozone might be changed in the next generation. Is it possible for the Euro to be so weak compared to the Yen that Nintendo and Sony's machines need to be built in different countries in order to make the enterprise economically viable?