Analysts downgrade electronic giant's stock following reports of PS3 malfunctions at

***wraggster*** · October 4th, 2006, 16:56

Via Gamestop

The PlayStation 3 launch is now just over six weeks away, and Sony Corp. stockholders are apparently getting nervous. Today, the Japanese electronic giant's share price slid 130 yen ($1.11) to 4,600 yen ($38.98) on the Tokyo Stock Exchange, a decline of 2.75 percent.

According to several news-service reports, the stock drop came after two major analysts downgraded Sony's stock on concerns about its gaming division, Sony Computer Entertainment. "We have adopted a cautious view of the impact of the [Sony] game business on the electronics business this term,'' Goldman Sachs analyst Yuji Fujimori told Bloomberg. Fujimori downgraded Sony's rating from "buy" to "neutral" citing "confusion over the release of PlayStation 3 and concerns [about] disappointing sales of [the] PlayStation Portable," according to the Associated Press.

Another Tokyo-based analyst, Macquarie Equities' David Gibson, went one step further. He issued a report expressing concern that many of the 200-plus PS3s on the floor of the Tokyo Game Show "operated erratically and had to be repeatedly reset," according to the AP.

"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 said. "We are concerned that such a problem has occurred so close to full production and is clearly negative news for the company."

In its defense, Sony said the PS3 failures were caused by unusually high temperatures created by having many of the next-gen consoles operating in close proximity to each other. "It's not a problem with the PlayStation 3 unit itself," Sony spokeswoman Nanako Kato told the AP. "For a normal player at home, there shouldn't be any problem."

The downgrades come at a bad time for Sony, which is already coping with a massive recall of laptop batteries it manufactured. On Friday, Dell announced that it was increasing the recall of Sony batteries used in its systems from 4.1 million units to 4.2 million units.

On the game front, the company recently had to delay the PS3's European launch to March 2007 and cut day-one inventory of the console to 100,000 units in Japan and 400,000 units in North America. The company says it will still ship 2 million to 2.4 million PS3s by the end of the year.

**mr_nick666** · October 4th, 2006, 17:03

Another stumble in the hurdle race that is the PS3

Will they ever reach the finish line???

I'll have my Wii in time for Christmas

**troom** · October 4th, 2006, 17:14

hope this is not a major problem because i all ready prebought my ps3 last week thats why i had a x-box form the start and not a ps2 because they had a lot of bugs like overheating,crashing not loading dvd ect so if i get this ps3 and it has that many problems i will FN loose my mind.

**hahahaha** · October 4th, 2006, 17:20

one of sony's products having technical difficulties?!?!?! thats unheard of!

**F9zDark** · October 4th, 2006, 17:43

This is what happens when you let assholes who have no idea about gaming, electronics, hardware, etc control the money of the company who knows what their doing.

Funny only Sony suffered a stock drop when the article I read about the TGS said ALL hardware was having issues because the of venues sweltering heat...