PS3 platform holder Sony has predicted a huge impact’ to its earnings as a result of the deepening European financial crisis.
Bloomberg reports that Sony buys very few components from Europe, meaning the list of possible actions it can take for mitigating circumstances is significantly reduced.
Europe is one of Sony’s largest markets – accounting for 21 per cent of revenues, compared to 20 per cent in the US – and the single European currency is currently trading at its lowest point against the Yen in a decade.
Sony loses around 6bn for every 1 decline against the Euro. It is now expected to miss its full year earnings predictions by about seven per cent. Sony has sold two European factories in the last year.
Furthermore, raising prices is a tough call considering the increasingly aggressive competition from Korean manufacturers such as Samsung.
There are no countermeasures that we can take for the moment,” Sony’s corporate treasurer Hiroshi Kurihara said. There is a huge impact on our earnings.”