Sony Slashes Profit Forecast

Price reductions and European delays for the Playstation 3 console along with poor PSP sales and laptop battery recalls have led Sony to dramatically cut its profit forecast for 2007.

The news of late has been a see-saw between good and bad as Sony prepares for the launch of the Playstation 3. While there is strong indication that anticipation for the new Playstation is great and presells sold out in moments, poor sales of the PSP, the Japanese price reduction, European delays and Sony's planned record loss during the launch process have driven down the profit forecast.

According to Reuters, "Sony Corp. (6758.T: Quote, Profile, Research) on Thursday slashed its profit outlook by 62 percent because of battery recall costs and a larger loss at its game unit, missing market expectations by a wide mark and putting its nascent recovery in doubt."

This is bad news for a Nikkei index that already slipped by over half a percent on Thursday following news of sharp losses for chip makers, and Sony Corp. which had only just recovered sharp losses over the previous month on the market.

The Reuters article went on to point out that, "Sony expects losses at its game unit to nearly double from its initial estimate to 200 billion yen for the year to March after it cut the price of a model of the PS3 with a 20-gigabyte hard disk drive by 20 percent in Japan to spur demand."