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Sony to cut production costs further

Corporation to offset falling export profits due to strengthening yen, possible impact on a PS3 price cut?

Sony Corporation has underlined its intention to further cut production costs of its goods and fulfil more orders in an attempt to offset the reductions in export profits caused by the strengthening yen.

The current economic conditions, which have seen the yen make significant gains on the dollar in the past year, could impact the company's ability to offer any further price cuts on the PlayStation 3 in the foreseeable future - a move which spurred significant sales in the final quarter of 2007.

"As to the situation of the US dollar's weakness in the medium to long term, we already have a strategy to deal with it," said Ryoji Chubachi, Sony president, according to MSN Money.

"We will lower our production costs as possible as we can and we will choose production sites to cope with the industry's weakness, and in the short term, we will try to accept more orders."

For every JPY 1 gain versus the US dollar, Sony loses around JPY 6 billion (USD 58.3 million / EUR 37.5 million). In the past year the yen has moved from an exchange rate of 111 to the US dollar, to 102.5 - representing a loss of around JPY 51 billion (USD 496 million / EUR 318 million) for Sony.

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