Exchange rates fluctuate, there will be times when the won is strong and the yen is weak.  Right now the yen is unusually strong and the won unusually weak.

Are they expected to post a profit? I've looked over Panasonic some time ago and they looked slightly less vulnerable than Sony, but not that different (better profit margins but I don't remember much about the cash/debt situation).

Ah, the great man theory of economics.

So are we going to Ban forbes.com and times.com and all the other networks that say Sony is doomed??

We wouldn't want anyone on this website to freakout about all these "doom" threads, so why not just ban members from mentioning these articles?

at least your thread is not moved or deleted, so we can discuss in sales forum, even this thread is 4th or 5th to discuss sony loses

What would this mean for the future of the PS3? Can Sony afford a price drop on PS3 in 2009?

By reading this news it sounds very bad for Sony as a whole not just its gaming division the whole Sony business is in turmoil at the moment.

$1 to $2.2 billion dollars in losses for this fiscal year and another $5 billion loss expected for the next fiscal year.

I very saddened to see Sony in this position. I hope they can find a way to turn the corner and become profittable again - soon. Time is a big factor though with the world going into a recession they cannot afford to continue losing money, they just won't be able to recover.

HONG KONG (MarketWatch) -- Japanese consumer electronics companies face mounting headwinds this year, with analysts forecasting few chances of an earnings turnaround soon as debt-laden consumers in their chief export markets tighten spending as the recession deepens.

SONY CORP. and TOSHIBA CORP. are both forecast to post operating losses for the fiscal year ending March 31, according to media reports Tuesday.

The outlook for CANON INC. , the world's largest digital camera maker, was also called into question after the chairman said year-end holiday sales were "disappointing" and he expected a difficult year ahead as the recession dampens consumer demand.

"I see no real evidence of a turnaround," said Uwe Parpart, chief Asia strategist with Cantor Fitzgerald in Hong Kong, referring to the sharp drop in Japanese exports.

"Consumption in the consumer electronics sector, like consumption overall, is dependant upon people being able to spend, and when they lose their jobs and have no prospects of getting it back soon, then consumption will suffer."

Data released Friday showed the U.S. economy shed a net 524,000 jobs in December, bringing to 1.9 million the number of jobs lost in the final four months of the year and lifting the unemployment rate to 7.2%.

Parpart said Japanese firms that saw poor Christmas-period sales are unlikely to see much improvement in January and February, months that are traditionally slow for retailers in Europe and North America.

In Tokyo trading Tuesday, shares of Sony closed 8.9% lower, Toshiba's fell 8.6% and Canon's ended down 7.2%.

Underscoring the difficulty, Japanese exports plunged 26.5% in November from a year earlier, while imports contracted 13.7%, according to data released by the Finance Ministry Tuesday.

The nation's current-account surplus shrank 66%, the ninth straight month of contraction. November's current-account surplus amounted to 581.2 billion yen ($6.46 billion), down from 1.71 trillion yen in the year-earlier period.

"Japanese companies selling to the U.S. are suffering badly," Parpart said. ""Correlate U.S. job losses to U.S. retail sales and that makes the whole thing quite clear."

Sony is likely to post its first group operating loss in 14 years this year, according to a report in the Nikkei online newspaper Tuesday. The firm may declare a group operating loss of around 100 billion yen ($1.12 billion) in the year ending March 31, but the final figure could be significantly higher depending on inventory levels in the January-March quarter, the report said.

In October, Sony had forecast a full-year operating profit of 200 billion. The projected loss would be only the second since Sony went public in 1958, the Nikkei reported.

Last month, the electronics company had announced plans to cut up to 16,000 jobs, including temporary workers worldwide, in a restructuring aimed at helping the company withstand the impact from a global economic downturn.

In addition to the layoffs, Sony had said it will slash investments in its electronics business by 30% in the fiscal year ending March 31, 2010, withdraw from unprofitable businesses and step up outsourcing.

Toshiba is also feeling the pinch from the global recession, with the firm likely to post its first loss in seven years. The company is likely to post a group operating loss of around 200 billion yen, owing mostly to weak performance in its semiconductor business, the Nikkei newspaper reported Tuesday without citing its source.

In October, Toshiba had forecast a profit of 150 billion yen. The reports said the chip market has foundered amid oversupply and sliding demand for flash memory products. Toshiba has also been hurt by weaker demand for laptops and in its home appliance business, the report said.

"Western economies are in much more a mess than people generally believe," said Peter Elston, chief strategist with Aberdeen Asset Management in Singapore.

Elston added there was little chance for meaningful recovery in the global economy until Asian consumers began to ramp up spending.

"Digging out of this hole in consumption is going to be painful for many Asian economies," Elston added.

An added headwind is the strengthening yen, which makes Japanese-made goods more expensive overseas and lowers the values of those sales when they are repatriated back into yen.

The U.S. dollar weakened to 89.11 yen in Asian trading Tuesday, compared to 90.42 at the end of last week. The euro was exchanged 118.24 yen, after sliding 2.1% to 119.09 yen in Monday's New York session.

Expected 5 billion dollars for next year? Am I reading this right? PS3 division is roses to sony if the rest of the company is losing that much money.

Good thing they have (had) a lot of money.