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Sony profits slashed as PS2 promotion costs bite

Strong Yen doesn't help either

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Sony's profits plummeted 32 per cent during the 12 months to 31 March 2000 as the company ramped up its PlayStation 2 marketing campaign and overseas sales were hit by a strong Yen. Neither is surprising. The high value of the Yen compared to the dollar has been a recurring problem for the company for at least the last four quarters, hitting in particular its consumer electronics exports. And the money Sony has been throwing at PlayStation 2 - along with the cost of recalling faulty Memory Cards and the occasional duff console - has been stupendous. And PlayStation 1 marketing hasn't let up overseas, even though the US and European launches are now less than six months away. Continuing marketing spending on PlayStation 1 and the autumn's US, Europe and Japan (in time for Christmas) PlayStation 2 blitz is likely to have a similar impact on Sony's current fiscal year. Indeed, the company said it doesn't expect its net profit to change much during fiscal 2000, though its operating profit should rise by six per cent, bosses predict. And Sony is set to make more major investments in broadband networking during the year as it readies the high-speed Internet entertainment services it's planning to launch March 2001. For the year to 31 March 2000, Sony recorded a net profit of Y121.84 billion ($1.14 billion), down from the Y179 billion ($1.68 billion) it made last year. ®

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