Nintendo, Sony, I Feel Your PainS

It may not seem like it, but Nintendo, Sony, and I have something in common: we're all getting screwed by money.

The U.S. dollar has hit record lows, sliding below 81 yen. That means for every dollar earned, Nintendo, Sony and I only get 81 Japanese yen. Money evaporates during the currency exchange! Poof!

It's rather crushing to see money disappear like that. Don't believe me? Ask Nintendo. Ask Sony. Heck, ask our own Luke Plunkett. The Australian dollar is also at an all-time high against the US currency.

The strong yen is great if you are in the business of bringing foreign goods into Japan, but sucks if your Japanese business is built on selling your wares abroad.

With America being such a large market for entertainment, Japanese game companies are getting hit hard by the strong yen. Their financial forecasts and reports peg the weak dollar as a cause of lower performance.

What does this mean? Well, it means that Japanese companies like Toyota are looking to move more of their manufacturing out of Japan. Japanese Prime Minister Naoto Kan said he was "very concerned" about the strong yen. He should be.

For the game industry, the strong yen might mean more outsourced titles. Companies like Capcom and Konami have outsourced titles to Western developers in hopes of making titles that appeal to Western gamers. But Japanese studios could look to outsourcing also as a way to negate the strong yen. In the short term, that'll be good for the Japanese game industry, but in the long run, it won't be.

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