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Oct 3, 5:35 AM EDT
Sony Shares Fall on PlayStation Concerns
TOKYO (AP) -- Fresh concerns about the upcoming release of Sony's
much-anticipated PlayStation 3 video game console and reports of erratic
performance dragged Sony shares down 2.75 percent Tuesday.
Technical problems for the PlayStation 3 would be the latest embarrassment
for Sony, which has already had to twice delay the product's launch, and is
facing stepped up competition from rivals Microsoft and Nintendo.
Sony has also been hit by the recent string of recalls for its lithium ion
batteries for laptop computers.
PlayStation 3 units on display at the Tokyo Game Show about 10 days ago
operated erratically and had to be repeatedly reset, according to a report
released Monday by Macquarie Equities analyst David Gibson in Tokyo.
"While the reason for this is unknown, we suspect it may be due to
overheating as a result of enclosing the units and the high temperatures at
the venue," Gibson wrote. "We are concerned that such a problem has occurred
so close to full production and is clearly negative news for the company."
Sony denied that there was any technical problem with the PlayStation 3.
Earlier in the day, investment firm Goldman Sachs Group Inc. lowered Sony's
stock rating to "neutral" from "buy," citing confusion over the release of
PlayStation 3 and concerns that disappointing sales of PlayStation Portable
may weigh on its earnings in electronics operations more heavily than
expected.
Sony's stock tumbled 130 yen ($1.11), or 2.75 percent, to 4,600 yen ($38.98)
on the Tokyo Stock Exchange.
The PlayStation 3 will hit stores in Japan on Nov. 11 and in the United
States on Nov. 17. In Europe, they won't go on sale until March, four months
later than planned.
Sony spokeswoman Nanako Kato said any problems at the Tokyo Game Show, where
Sony, Microsoft and Nintendo showed off rival offerings under the same roof,
were likely caused by one-of-a-kind temperature irregularities.
About 200 PlayStation 3 units were clustered together in close proximity and
housed in kiosks that concentrated the heat generated by their processors
and provided poor ventilation, Kato said. Overheating under such
circumstances is a common affliction at trade shows, afflicting not just
Sony products but those of its competitors, she said.
"It's not a problem with the PlayStation 3 unit itself," Kato said. "For a
normal player at home, there shouldn't be any problem."
Sony is sticking to its plans to ship 2 million PlayStation 3 units by
year's end and 6 million by March 31, 2007, she said.
Redmond, Wash.-based Microsoft Corp. rushed its next-generation Xbox 360 to
Japanese markets last year to get a head start on its rivals, but it has
seen sluggish sales in Japan, which is one of the world's biggest video game
markets but one in which players have a deep loyalty to homegrown Sony.
Nintendo Co. meanwhile is planning to launch its new Wii game console in the
final quarter of the year and price it below both rivals, the Xbox 360 and
the PlayStation 3.
Not looking good for the PoS3, is it? 
Not looking good for the PoS3, is it?
rMUg.21982$QZ1.10360@bgtnsc04-news.ops.worldnet.att.net...
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