Thursday, October 23, 2008

Sony Earnings Forecast Cut

This was timely:
Sony, the Japanese electronics giant, has slashed its earnings forecasts by 57 per cent in a massive profits warning, reflecting the growing weakness of businesses across the global economy.

...Where Sony had previously expected to make Y470 billion (£2.94 billion), profit is expected to come in at Y200 billion because of falling demand for its products in its key markets while the strengthening yen has hurt its export business.

Given the collapse in many of Sony’s main markets, particularly the US consumer’s taste for digital cameras, LCD televisions and other gadgetry, analysts had expected a profits warning. But the 57 per cent cut to the forecast was far below even the most pessimistic of forecasts.

Full article here.

To be fair, Sony didn't specifically mention the PS3, but I would be very surprised if it isn't underperforming as well. And like I said, if people think videogames are recession proof, they need to consider the size of the recession. At some point, economic pain does translate into less dollars to spend on entertainment.

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