Playstation 2 glitches trigger fall in Sony's share price

Sony's share price fell sharply on Friday when the electronic games giant admitted that there were malfunctions in some of its Playstation 2 games consoles.

The ill-timed leak coincided with Microsoft's announcement that it plans to challenge Sony with the launch of its X-Box video games machine.

The software giant said it intends to spend billions on developing and marketing the product as it prepares to enter the $20bn (£12.6bn) worldwide video game market.

While Sony did not specify how many complaints had been made in total, it admitted that it had received more than 340 from customers unhappy with glitches in the Playstation 2's memory cards.

The company said in a statement that some users may have trouble playing a DVD disc after using the memory card to record their game playing. As a result, Sony asked customers who have experienced this problem to return the memory cards or the consoles.

"The problem is not because of specific Playstation 2 software," said Sony. "We assume that those memory cards were defective. We will discuss how to improve our products to gradually reduce the defect rate as much as possible."

The company could not say how long the investigation would take or what the chances were that consoles might be recalled.

The value of Sony's shares fell by 6.41 per cent to 26,300 Yen (£158) per share on the news, and have dropped by a total of 22 per cent over the past seven trading days.

Sony's profit is heavily reliant on its Playstation range of games consoles, and it claims to have sold 980,000 Playstation 2 consoles in the first three days of the machine going on sale in Japan. The 39,800 yen (£239) device includes a specially designed processor for lifelike graphics, a DVD player and the ability to play most of the games designed for its original Playstation machine.