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Forums - Sony - SCE: Things are looking up. Is a price cut really out of the question?

Squilliam on 30 December 2008
makingmusic476 said:
Squilliam said:
The Yen problem drives up the cost of their Jap operations, but as the PS3s costs aren't centred on Japan I don't really see a massive problem there.


 

Excellent point.  Ps3s haven't been manufactured in Japan since launch.  It's China only at this point,a s far as I know.

I assumed it might be a problem, however, becuase it seems to be effecting the entirety of Sony to a drastic degree, and I figured most of Sony's manufacturing would be done outside of Japan, so I assumed it would effect their PlayStation business as well.

Of course, a large portion of SCE's operating costs are in NA and EU, with SCEA and SCEE's development studios and whatnot.

I have a feeling its got something to do with the inventory -> revenue -> production + Profit/Loss workflow.

The currency fluxuations effect the profit/loss portion a little but only when they convert the money back into yen. If they don't convert it (losses) I don't see how its costing them.

Maybe the issue is that they sell their gear to retail chains on the usual 90 days line of credit and the money they are getting in return for the goods is far less than they anticipated. IE sell PS3 expecting X revenue in 90 days, but instead recieve the smaller Y quantity due to the deflation of the currency.

 

 



Tease.

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Seraphic_Sixaxis on 30 December 2008

^- Stop speaking big words i no how to can un-dar stan. ;(



NJ5 on 30 December 2008
Squilliam said:
The Yen problem drives up the cost of their Jap operations, but as the PS3s costs aren't centred on Japan I don't really see a massive problem there.


Sony's CFO disagrees.

 



My Mario Kart Wii friend code: 2707-1866-0957

fkusumot on 30 December 2008
Squilliam said:

The currency fluxuations effect the profit/loss portion a little but only when they convert the money back into yen. If they don't convert it (losses) I don't see how its costing them.

 

They do have to convert it all back into Yen. That's how they report profit/loss to their shareholders.



I Blame Wii Fit!

markers on 30 December 2008

couldnt they have respective bank accounts in NA/others and hold all the money in said bank accounts riding the storm out waiting for the dollar/euro to regain its usefulness and then convert the money back to yen? lol that would be awesome



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NJ5 on 30 December 2008
markers said:
couldnt they have respective bank accounts in NA/others and hold all the money in said bank accounts riding the storm out waiting for the dollar/euro to regain its usefulness and then convert the money back to yen? lol that would be awesome

Not to a big extent... Sony spends (and receives) billions of dollars every month, they can't let a lot of the cash they get sit still for a long time. Their cash reserves are about $7 billion which is not enough to fund operations for a long time as you can see here:

http://finance.google.com/finance?fstype=bi&q=NYSE:SNE

What they do is currency hedging, which reduces the impact of the weak dollar/euro. You can read about it in the link I put above.

 



My Mario Kart Wii friend code: 2707-1866-0957

makingmusic476 on 30 December 2008

Hm. I wonder how much operating costs could offset the gains made from the sources in the OP.



makingmusic476 on 31 December 2008

This is totally not a bump. >_>



blazinhead89 on 31 December 2008

^LOL , Nice op MakingMusic, Sony will be fine.



Kantor on 31 December 2008

I think whenever anybody says Sony/the PS3 is D0000000M3D!, we have to link this thread.



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