Sony Halves Profit Forecasts

Officials from Sony Corp. have more than halved the company’s profits forecast for the year, after counting the cost of laptop battery recalls, weak sales of the PSP and additional costs associated with the launch of the PlayStation 3. The company cut profit forecasts for the financial year ending March 31st from ¥130 billion ($1.10bn) to ¥50 billion ($421m), around one quarter of the previous year’s figure. The announcement follows a recall of 9.6 million Sony-made laptop batteries, which potentially pose a fire hazard, at a cost of ¥51 billion ($430m). The company also blamed the drop in profits on heavy losses in its game division, following the recent announcement of a price cut for the basic 20GB hard drive version of the PlayStation 3 in Japan. Slow sales of the PSP were also blamed for the problem, with the company lowering its shipment figure for the portable console for year end by 25 percent to 9 million units. As a result, the company expects losses for its game division to almost double from initial estimates of ¥200 billion. However, the company has predicted "a significant improvement in profitability" next year following the worldwide launch of the PlayStation 3.