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Sony Stock Takes Hit Over Concerns For PS3 Launch

| 4 Oct 2006 16:05

Following concerns over the PS3 launch, a downgrading by Goldman Sachs, the announcement of launch delays in Europe, and reports of unpredictable hardware performance at the Tokyo Game Show, Sony's stock on the Tokyo Stock Exchange dipped by nearly three percent on Tuesday.

It seems that lately, the news for Sony as it approaches the final month before launch has all been negative. The dip in Sony's stock is all the more notable as it comes the same day that Nintendo announces a 20% increase in its projected profits for the fiscal year.

Embattled Sony is already on the ropes following wide recalls of their lithium laptop batteries, and the reports of poor performance at the Tokyo Game Show have left many consumers and investors concerned about the electronics giant's ability to manage the November launch. New York investment bank Goldman Sachs, on Tuesday, downgraded Sony's stock rating from 'Buy' to 'Neutral' "citing confusion over the PS3 release and concerns over disappointing sales of PSP."

The most notable issue in the press for Sony that past week, however, has been unreliable performance from the PS3 systems on display at the Tokyo Game Show. The AP reports that, "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."

David Karraker, senior director of corporate communications with SCEA, responded to Next Generation criticisms of the alleged TGS problems, and claimed that the reports were unreliable, unattributed to specific sources, and erroneous. Karraker told Next Gen, "SCEI are not aware of any instances of this occurring at TGS, nor have we received any reports from third parties to such effect." He went on to say that any few instances that may have happened were likely due to unusual and adverse conditions "environmental conditions", and denied flatly that the PS3 has any overheating problems.

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