the euro, the loonie, are two of the chief problems for sony the euro at the rate it is falling will be equal to or less than the dollar by january, and that hurts a lot. sony was depending on euro to see them through and be able to make price cuts next spring, if conditions continue like this even a price cut then which i had believed would happen in march is very unlikely they will simply not be able to afford it.  now what they might do is try and shift sales to the states and advertise more and bundle more there, but if the dollar starts a slide too it will kill them again. very tricky place they are in, and its only antagonized further by the poor sales figures in japan.

but this is also going to show more in ms sales and nintendos, all three will have a tougher time without the fat of the strong euro, all three will look to native sales to help them through the tough times, and sony has not managed to get the ps3 up in japan like in previous generations.... i speculate for them GT, and FF can not come soon enough, and it would be worth moneyhatting to keep ff ps3 only in japan (though for ms it might be worth it if they see real gains or even a new higher level weekly sales to pay the escape clause penalties and then a bonus to have it there .... catch 22 for sony good for square enix )

Its actually a 90% drop in YoY profits.

Though its not really that bad since alot of that has to do with the stock market/ yen vs. Dollar and Euro and Pound + the lack of profit from SONY selling their old Headquarters building last year.

The games division has done well YoY -- though the holiday quarter will be vital to SONY's chances of making a profit this fiscal year... 5.4 billion yen profit Q1, 39.5 billion yen loss Q2, ? Q3 and ? Q4....

Though a 34.1 billion yen loss is much better than last years 125 billion yen in losses (in the first 2 quarters )...

Hopefully things pick up.

Here's something an economic baboon like me doesn't understand:

If they have such a backlash from the yen, can't they just have some sort of factories (or deals with factories) all across the most important territories?

A factory in Mexico or whatever other country is rather cheap in the American zone, a factory in Eastern Europe, and one in Asia...

Shouldn't that offset the possible losses from the Yen?

If they already produce and sell from the region's currency, isn't the drop-off from another currency then eliminated?

It doesn't have to do with horrible sales and such.

It's the stronger yen than a weaker dollar. As you can see, the sales for the TVs are solid, as are PS3 sales. It has to do with the economy... Sony can't do anything about that.

I doubt that they ment it that way... the Walkman is loong dead and the Walkman brand is far not a top one anymore... just that many epople still remember Sony as the Walkman creator ;)

This. 

I posted this in the other Sony financial thread.  Sony loses 40 million dollars for every yen gain against the dollar, and they lose 77 million for every yen gain against the Euro.  They yen has gained 16 against the dollar from the end of last quarter to the end of this quarter(107 to 91).  That's a 640 million loss just on currency conversion.  Sony is meeting their sales targets(increasing the PSP by 1 million units), and they are controlling costs.  That is all they can do, the rest is up to the markets.

@ dbot: could you answer my question too, because I'm not getting this at all...

I think that Sony is betting that the yen will eventually fall in which case they would actually benefit from the currency exchange.  Factories cost a lot of money and their return is realized over many years.  The yen problem should be a relatively short term issue.

The yen's gains have been primarily due to the fact that the Japanese economy and financial system is seen as being in much better shape than the rest of the world.  In the past investors would buy the cheaper yen and invest it in other countries which would drive down the yen even further.  Since the other economies are shaky at best, investors are buying and holding the yen.  Long term, the yen will correct itself.  75% of Japan's economy is exports, they cannot allow their yen to appreciate against other currencies.

So it's going to be tough for Nintendo as well?