14 DAY TRIAL // Video game hardware market Sony might be doing well on the European market with both the PlayStation 3 home console and the PSP handheld but it seems that decline of the Euro might threaten its future financial results.
Hiroshi Kurihara, who is the corporate treasurer for Sony, has stated that Sony has a problem with the fact that it is buying most of its components from Asian markets, where suppliers are asking for payments in dollars, and gets very few from Europe.
He said, “There are no countermeasures that we can take for the moment. There is a huge impact on our earnings.”
The treasurer says that Sony is not interested in increasing prices in order to compensate for the decline of the Euro, adding, “It’s difficult to raise prices in Europe due to the competition with Korean makers. We can’t run away from currency risk as long as we sell overseas.”
At the moment Europe is being affected by a sovereign debt crisis which originated from Greece and is also affecting Italy, Ireland and Spain.
The fragility of the Euro zone and the inconclusive measures adopted by political leaders have made the Euro less attractive for financial markets.
This is especially worrying for those companies that, like Sony, see Europe as the biggest market for their flagship products.
Traditionally the PlayStation 3 home console has performed better in Europe than in the United States, where it has been overshadowed by the Xbox 360 from Microsoft and the Nintendo Wii.
Sony has already been hit this year by the effects of the tsunami and earthquake that took place in Japan and by the hacker attacks that took down the PlayStation Network during April.
The company is at the moment getting ready to launch the PlayStation Vita handheld on December 17 in Japan and during the early months of 2012 in North America and Europe.