Now that the holiday quarter is over, we can finally look back at the average exchange rates and information on electronics demand during the recession which is starting. To put it simply, a lot of the positive and negative factors are out of Sony's control, so there is some uncertainty for 2009 as a whole. Nevertheless, I'm willing to put down some predictions.

Here's the info:

The $ to yen conversion rate ended the year at 90.8, down from 105.3 at the beginning of the quarter and 111.4 yen at the beginning of 2008.

The € to yen conversion rate ended the year at 126.7, down from 148.8 at the beginning of the quarter and 162.7 at the beginning of 2008.

(source 1, source 2)

Preliminary information about dropping electronics demand due to the recession can be found below:

http://www.iht.com/articles/2008/12/22/business/22yen.php

Based on this information and some more things posted below, my Sony predictions for 2009 are:

1- Despite all the doom and gloom, the PS3 will not be discontinued because SCE will play things smartly.

2- Sony posts a significant loss for the holiday quarter due to the strong Yen and weak electronics demand. A rather safe prediction is a $1.5+ billion loss. More than $2.5 billion in losses wouldn't surprise me either (see note below)

3- No later than April, Sony announces more cost-cutting measures (such as layoffs and/or discontinuing weak products).

4- Sony doesn't cut PS3's price in NA/EU before October 2009 in the company wide push for profitability. SCE doesn't want Sony's higher ups and investors breathing down its neck.

5- The Yen may start to weaken in a few months (due to Japan's Central Bank efforts), but Sony will still struggle to post significant profits before the company is significantly restructured due to a worsening business environment throughout the year.

Note: The predictions about Sony's profit/loss are calculated from Sony's typical holiday quarter revenue (around $30 billion) and profit margins, a 18% average drop in the dollar/euro, and Sony's CFO declarations on the impact of currency hedging. All in all a rather simply calculated number, but it seemed to work well when I tried it for previous quarters. There could of course be some extraordinary items in the quarter interfering with these numbers (either up or down).

I think these are pretty realistic predictions. I could see further layoffs and attempts to sell certain business segments as well.

what's unpopular about your prediction ? .Dramatic effect maybe ?

Good analysis, and I agree that it won't get a price cut until October / November '09.

Before I started gathering data for these predictions (about a month ago), I never saw any analysts or vgchartzers predicting similar things, so I wouldn't expect these predictions to be very popular as of yet. Other than that, they don't paint a very rosy picture for Sony which can always be a little hairy around these forums.

 I'm kinda new here but it seems that saying "sony not doing well" = unpopular opion in some quarters.

You're right with your predictions they seem realistic .... but that wont stop some fanboy entering the thread making some claim that sony will drop the price because of OMGZ MARKERTSHARE!!1!

sony's fine.

Did anyone really think sony would give up on the ps3? Anyone?

Those predictions sound right to me, pretty sad some people actually thought Sony would give up on the PS3. Dont know why people would say that, in this case I would hope it was due to being a fanboy and not mentally retarded.

I cant see the first party being affected until Sony really go down the pan so as a gamer I am good to go. My dad is licking his lips being a stockbroker, some money to me made while the economy is down the pan.