Sony Hit by Claims of Playstation2 Glitch

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Sony Hit by Claims of Playstation2 Glitch

By Miki Shimogori

TOKYO (Reuters) - Shares in Sony Corp were hit on Friday after the electronics giant said it had received complaints of technical glitches in its newly launched PlayStation2 video game console.

A spokesman for Sony Computer Entertainment, Sony's game unit, said it was investigating complaints about technical problems with the console's digital video disk player.

Sony did not specify how many complaints had been made, but the news worried the stock market. The firm's shares were down 2.67 percent at 27,350 yen by midday.

The company's profits are heavily reliant on its PlayStation series and it would suffer a major loss of face if it was forced to recall the PlayStation2, which was launched with great fanfare on Saturday.

In the first three days, Sony said it had sold a stunning 980,000 units, cementing the view that it would help the firm retain top spot in the highly competitive video game market.

The SCE spokesman said it was investigating whether the reported technical glitches resulted from problems with the new machines or game software or the way users were operating the game player.

He could say how long the investigation would take or what the chances were that consoles might be recalled.

``We would make it public as soon as possible if we find any problem in our hardware. But we need to deal with the case according to the cause of the problems,'' he said.

Rumors about possible technical problems with the player's memory cards, which carry the software needed to play DVDs, had already hurt Sony shares overnight on Thursday, and the latest Sony comments knocked them down further in Tokyo on Friday.

Sony Shares In Correction Mode

News of the possible glitches coincided with U.S. high-tech giant Microsoft Corp's announcement in Tokyo that it would challenge Sony with the launch of its powerful ``X-Box'' home videogame machine some time in 2001.

Sony shares have staged a painful 17 percent fall in the last six sessions on what was seen as a technical correction after hitting a record high of 33,900 yen.

``The PlayStation problem gives the market the best excuse to sell Sony, which was already heading downward,'' said Hiroyuki Nakai, senior executive officer at Nippon Global Securities's investment research department.

Japanese investors are also keen to lock in profits in highly-valued high-tech shares like Sony ahead of financial-year book closing on March 31.

Sony shares, Japan's bluest of blue chips, had enjoyed a nearly four-fold rally since January 1999, which prompted its outspoken president Nobuyuki Idei to send a rare alert in January, saying that a share price above 20,000 yen would be a ''bubble.''

On Thursday, a spokeswoman for San Francisco-based Sony Computer Entertainment (U.S.) denied there were any technical problems with the player's memory cards and dismissed the Internet-based recall rumors as pure speculation.

http://dailynews.yahoo.com/h/nm/20000309/tc/tech_sony_1.html

-- Jen Bunker (jen@bunkergroup.com), March 09, 2000

Answers

Sony Denies PlayStation Recall But Glitches In The Hot New System Are Rampant TOKYO, Updated 12:53 p.m. EST March 10, 2000 -- Sony Corp. denied Friday rumors that its PlayStation 2 game console will be recalled because of technical problems.

But the company acknowledged that the game system's 8-megabyte memory card can erase data that runs the system and the digital video- disk player, and customers with unsolvable problems should return their machines for a replacement.

The company has sold 980,000 consoles so far, and has received about 340 phone calls from customers complaining about the glitch, Sony Computer Entertainment spokesman Benjamin Gurnsey said.

Sony's stock tumbled 6.4 percent Friday on the Tokyo Stock Exchange, to end the week at $247.45.

Sony is counting heavily on the sleek, black console to give it a boost in its war against Japanese rivals Sega Enterprises, which makes the Dreamcast console, and Nintendo, maker of the N64 console and the portable Game Boy.

The game machine was released Saturday amid great fanfare, stirring excitement with its vivid graphics.

Sony promises that the game machine will be available in the United States and Europe in time for Christmas. Gurnsey said the company was investigating the cause of the glitches.

http://www.channel2000.com/sh/technology/stories/technology-business- 20000310-152059.html

-- Martin Thompson (mthom1927@aol.com), March 10, 2000.


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