How PS4 Sales Could Be Affected By Japan's Deadly Earthquakes

Sony explains how the recent natural disaster affects its gaming division and the company overall.

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As part of its earnings announcement today, Sony reported that PlayStation 4 sales have grown for three years in a row, with some 40 million systems sold to date. This momentum is expected to continue, but CFO Kenichiro Yoshida warned that there is a chance PS4 component availability could be impacted by the recent earthquakes that shook southern Japan and killed more than two-dozen people.

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"We expect the strong momentum of the PS4 platform to continue," he said in prepared remarks [PDF link]. "Due to the impact of the earthquakes, there is a possibility that the supply of components from certain vendors might be affected."

However, even with that impact taken into consideration, Yoshida said he remains confident that Sony can still exceed 17.7 million PS4 sales (the number of consoles it sold in the previous financial year) for the upcoming twelve months.

"Currently, we are considering a variety of ways to minimize the impact of the earthquake on the results in this business," Yoshida said, referring to Sony's video game division.

Two earthquakes, magnitudes 5.4 and 7.3, rocked Kumamoto earlier this month, killing at least 29 people and injuring more than a thousand others, according to GameSpot sister site CBS News.

Because the earthquakes' epicenters were reportedly relatively shallow, they produced shaking and damage that was more severe than what might happen with a more traditional earthquake.

For more on the natural disaster, you can read CBS News' full report.

Sony has around 3,500 employees in the Kumamoto area. The company has confirmed the safety of all of its employees in the region, though it said some are still living in evacuation centers with their families. Sony's Kumamoto Technology Center semiconductor building was damaged by the earthquakes, but was described as not being too serious. Still, the company has taken its time to inspect the facility (made more difficult since the aftershocks went on for "a long time"), thus impacting the center's output.

The company expects to incur expenses primarily for recovery and reinforcement work. It did not put a dollar amount on the costs, but said it has delayed its earnings forecast until it can figure things out. The Kumamoto center primarily supplies components for digital cameras. "We deeply regret that our ability to supply them has been affected," Yoshida said.

Sony also revealed that it does not have earthquake insurance that covers direct physical damage and opportunity losses for lost sales. However, the company can get back ¥20 billion, but Yoshida warned this may not cover the full amount of losses that resulted from the earthquakes.

While not directly affected by the earthquakes like Sony was, Square Enix--which is based in Japan--made a sizable donation to support the ongoing relief efforts.

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