You either can't read or like to fib, because I never said or implied that the Yen is going to get better or worse. I really don't know which direction it will take, but I wouldn't hold my breath on the Japanese government saving the day after nearly two decades of market decline.

I'm fairly sure that Sony pays it Japanese staff in Yen and the rent on their Japanese real estate is in Yen.

The bottom line is.... the Yen appreciation has an impact on Sony's bottom line, which affects their ability to reduce the prices.

What do you not understand about that?

Oh wait, he has a strawman all prepared for us. I never said the Yen wouldn't weaken, although I did say I wouldn't count on it in the short/medium term.

Hah, ok this is ridiculous. The hypocrisy of fishyjoe of all people referring to me as a "fibber" after his curious lecture on modern Japanese financial history is a bit much.

If Sony's position is going to be hurt in a significant way by currency movements in 2009 then you are implicitly arguing the EIU's forcast is much to high. Are neither of you saying this? Is this line of reasoning hopelessly flawed? If you are not saying this or I'm simply missing something critical, I appologize to you for my misreading or misunderstanding. As for our friend fishyjoe I cannot see how any rational person could interpret the sentence I was responding to as anything but wrong.

@alephnull: I've said plenty of times that Sony has a chance of getting helped by the Japanese central bank. I never said their situation is hopeless, just that it's very bad if things continue this way. I can point you to specific posts of mine where I said so if there's any doubt.

It's more interesting and productive of us to argue the probabilities of each scenario, even though this is a very complex matter. One of the reasons why I don't count on the situation improving soon is that the American/European governments seem to be doing all in their power to devalue their currencies, with interest rate cuts, money "printing" and whatnot.

How big an effort would the Japanese central bank have to mount in order to not only cancel out these measures but also prop the dollar/euro further up than their current values?

@gebx, never give up hope. Keep hoping for things to get better. You have to understand that things will get a lot worse before they get better. I think that already has been accompish, so things will look up for 2009.

You're correct!

Things will get a lot worse, the PS3 will never be able to get out of this mess.

Sony will get better when they release the PS4. Priced properly and with proper software support.

The US will eventually stabalize.....hopefully.

Facts:
1. Sony's expense line is heavily loaded with Yen based expenses.
It has 10s of thousands of highly paid employees in Japan (most of its management ranks) and some of its manufacturing is done on the island. In the gaming division you will find a good number of Japan based studios, all getting paid in Yens. Therefore Sony is very sensitive to the strength of the Yen.

2. No central bank is in control of the situation these days.
If they were, the recession would not be happenning. Any news of what the BofJ is going to do must not be taken as anything but wishful thinking.

End of facts.

I am no financial expert but I am pretty sure that they Dollar will continue to weaken faster than any other currency. The reason: The US goverment is flooding the market with Trillions of newly printed dollars for TARP, Auto Bailout, Low Mortgage rates and the Trillion Dollar public works project of Obama.

No other country can depreciate its currency as fast as the USA. A weak dollar is great for the battered US economy. It makes exports more profitable and makes the imports more expensive thus protecting American jobs. It also devalues the hugh national debt of the USA. This is exactly what the doctor ordered for the US economy.

I don't have any clue on European echonomics but I am willing to put a wager that at least the Dollar is not going to turn out stronger compared to the Yen in the next year.

I dont know, it might just be me. But I think Sony's top execs will have to cut some losses somewhere with the PS brand. The Playstation brand at the moment for Sony is a big hole in the bottom of the bank balance. It's destroying their company. The PS3 is one of the worst business decisions I have seen in recent years.

I have a bad feeling that Sony may cut alot of inhouse studios (ie let them go solo, or sell them.) If not that then the only things I see they can do is stop supporting the PS3, or miss the next gen entirely.

That 10 year plan they had is long gone now. Considering only 1 department of Sony has had their plans accepted (16,000 jobs cut from one sector) the others including the games division have yet to have the green light on their proposals to save money.

Something has to give soon with the PS brand or they will lose it all.