Sony suffers PlayStation3 setback

Sony suffered another burst of embarrassing publicity for its long-awaited PlayStation3, just days before it is launched in the vital US market.

The Japanese giant was forced to admit that, despite earlier promises to the contrary, a large number of games designed for the PlayStation and PlayStation2 will not be properly compatible with the new console.

News of the glitches come as Sony is about to go head to head with Nintendo for the affections of a new generation of gamers. Its countrymate and rival is launching the Nintendo Wii in the US on Sunday, two days after the PS3 goes on sale. The Wii has won plaudits for its touch-sensitive joystick and is being pitched at new, older potential gamers.

The PS3 was initially promised a worldwide release for spring this year but was postponed at the last minute to November, while the console will not be available at all in Europe for another four months, completely missing the Christmas sales period.

In the US, there have also been grumbles over the price. A PS3 with a 20GB hard drive will cost $499 (£260), while gamers who want a larger, 60GB hard drive will pay $599. This is the most expensive console ever - some $200 more than the launch cost of the PS2 six years ago, and $100 more than the Microsoft Xbox 360, which has already been on sale for a year.

In Japan, Sony slashed the price of the PS3 to try to ensure it maintains its market share in the gaming niche after several years where its performance in other areas of the consumer electronics market has been lamentable. Where once it was the dominant player across the industry, Sony has lost out to rivals in flat-screen televisions and digital music players.

The company needs the PS3 launch to be a success, after the spiralling devel-opment costs of the console led to a profit warning last month. It will also be the first mass market device to use Sony's new DVD format, Blu-ray, which is battling for dominance against a rival technology, HD-DVD.

Evan Wilson, analyst at Pacific Crest Securities, said: "It has taken much more than Sony expected to get the PS3 out through the door and it will dent the company's bottom line through next year.

"It is impossible to say if this is the end of the problems, but one thing I would point out in Sony's defence is that Microsoft had similar problems with the Xbox last holiday season."

The glitches revealed since the PS3 went on sale in Japan over the weekend may be rectified by online updates to the games, according to Sony spokesman Satoshi Fukuoka.