As it turns out, Iceland was right. We're still struggling with our crisis, while they have been blooming again for quite some time already. Had they listened to IMF, they'd still be drowning even worse than Greece is.

I hope Sony get's everything straight! In order to help, I'm getting my Vita next week! :)

Greece, as Spain, Portugal and Italy problem is that their government spend much more than they tax their citizens (Keep an eye in France, it's the next one who is going to have the same problem). Iceland problem was a monetary one, they had a much higher lending rate than UK or the Euro zone, so foreigners put their money in Iceland Banks. Their banks had a passive several times higher than their GDP.

We have a public debt crisis, Iceland had a private debt crisis (Irish problem is very similar to Ireland, that's why I haven't mentioned them with the PIGS)

http://www.grapevine.is/Home/ReadArticle/Half-Of-Icesave-Debt-Paid

It seems that the sum UK requested is being paid.

It isn't a budget crisis, as the other countries one. The Spanish government spends 10% of our GDP more than the total taxed money, every year, since 2007.

Sony situation is very similar to the PIGS one. Huge debt, huge interest payments, losses... You have to downsize to recover.

So, will this effect them getting loans?

Japan is suffering from losses in the manufacturing sector like the US. Electronics development in Japan is slowly becoming unprofitable, especially with the likes of China and South Korea becoming more and more viable options to the electronics consumer.

Unless the trend somehow reverses, Sony will HAVE to focus on services to garner interest in investors. It's a very slippery slope from here. Not only does BB- status drive away a lot of investors looking for a safe place to put their money, it also forces Sony to borrow at a much higher interest rate, which in turn eats into their turnover, causing more debt, and following by a lowering of their credit rating, etc. It's all cyclic down here, and Sony are spiralling towards the financial drainhole.

If another player comes into the games hardware market, like Apple, Google (we'll have to see how the little Android game box goes. It has massive potential!), or a rival electronics company like Samsung, Sony should cut their electronics branch entirely, and become a service based business, focusing on music, movies and games. A possible move to open "Sony Stores" afterwards to sell said digital software would be a smart move. they have a lot of say in all three industries.

When a company's credit rating is this low, ALL options to cut losses are on the table, including Playstation R&D, as well as their losses sold on each console.

It's a smart move that they're looking to use off-the-shelf hardware for Orbis, but if Sony decided to follow Nintendo's model and refuse to sell the console at a loss, do you think that would drive more customers to Microsoft? In a situation this dire, Sony have little choice in such a matter. 

Had Sony NOT had the first party development that they did with the PS3, they'd brobably be looking at exiting the game industry altogether. Now if things go bad, at least they can become a third party to other hardware manufacturers...

It will affect their ability to get loans, the increase the amount charged for credit received and likely add extra stipulations to any contract in loans received.

It's basically the same as someone with bad credit although nowhere near as unsafe, it's still similar because the loan amounts would obviously be astronomical relative to a single person applying for credit.

1. Loan amounts offered would be reduced.

2. Intrest payments increased.

3. Possibility of additional security needed for a given loan in case of defaulting.

Woah. Some people need some finance classes ASAP it seems.

OT though, can't say that i'm suprised. by how fast and ugly the situation got. Companies don't get free passes for trying to get better. Kind of like Yoda said " do or do not, there is no try". Because, did the layoffs and changing the site of production do anything to improve the financial situation in the last quarter? No it didn't, it only inflated costs.

the layoffs are sponsored by Sony with some retirement schemes and whatnot while setting up shop oversees and closing down in the mainland also generates big costs.

Some crazy ideas are flowing from other forum users. Like "Sony will just sell off their assets and pay back their debt!".

Uh-huh, yeah of course they will. Who the hell would buy it anyway? I mean sure, Samsung could buy out Sony's tv division for instance but why would they do that now and overpay when they can get it for much cheaper in the future? these divisions are not liquid assets, you can't just sell them and get the money as if it was a snap of the fingers. And most definitely not for the price that Sony will want to sell for.

This is part of the junk status that Sony has brought upon itself. The company is viewed by the market as a risky and well on it way to bankruptcy. If i remember correctly, Sony's debt is worth more than their market cap right now. What does that mean? It means that Sony is technically bankrupt already.

two or three more quarters of losses of this magnitude and money lenders will be calling out for immediate loan repayments. sony gets enough of those and its curtains down for them.

Unbelievable that it has come to this but honestly it's been hanging in the air for over a year now.