Sony has slashed its earnings forecasts by 57 per cent and downgraded its operating profit forecast for the full year ending in March 2009.
The electronics' company had expected to make JPY 470 billion (USD 4.8 billion/GBP 2.9 billion), however, profit is now expected to be JPY 200 billion (USD 2.04 bullion/GBP 1.2 billion).
Sony cited the reason behind the drastically reduced forecast as due to flagging demand for its products as well as the strengthening yen's impact on its export business, particularly on the company's videogame activities.
Sony said it also expected its electronics segment, including the LCD television, compact digital camera and video camera businesses, to be lower than forecasted, blaming poor demand brought on by the slowing global economy and greater competition to cut prices. As a result the company's net income is expected to fall short of July's forcast by 38 per cent, dropping from YPY 240 billion (USD 2.4 billion/GBP 1.5 billion) to JPY 150 billion (USD 1.5 billion/GBP 945 million).
This news breaks shortly after Sony Computer Entertainment's president, Kaz Hirai, confirmed that the company would not cut the price of the PlayStation 3 for the Christmas season, despite drastic cuts in the price of its main rival, Microsoft's Xbox 360.