Ouch (Supplemental
Geoff Engelstein correctly points out that the weakened U.S. dollar hurts Microsoft at the manufacturing level:In China the RMB has appreciated about 15% over the last 9 mos or so, which is starting to hit manufactured products. Plus labor rates in China are going up, as well as component costs. So the currency is actually making Microsoft's Cost of Goods Sold increase. It still helps them to sell into the EU, because the Euro is strengthening against the RMB (although not by as much), but costs for the US market will go up.
He's right, of course, and that's what I was originally thinking of--manufacturing costs (both components and labor), not the effect at the consumer level in Europe and Japan. So in the U.S. market, a weaker dollar does hurt, because it costs more to manufacture the console, and there's no benefit from a weaker currency at the point of sale.
Increasing labor and component costs, regardless of currency value, could also affect Sony and Nintendo, depending on the degree to which they rely on Chinese manufacturing.
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