Shares for Sony Corp. dropped nearly three percent on Tuesday amid reports that the new Playstation 3 encountered overheating issues at the recent Tokyo Game Show 2006 in Japan.
Macquarie Securities analyst David Gibson wrote in a report Monday that the machine may have stability problems due to overheating.
"We have heard that at the TGS PS3s had stability problems and had to be reset often. 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. We understand that Sony is investigating the issue and has not determined the cause as yet," Gibson wrote.
"We are concerned that such a problem has occurred so close to full production (end-Sept) and is clearly negative news for the company."
The PS3 will drop to Japan on Nov. 11 and in the U.S. on Nov. 17. Sony has delayed the machine's release to Europe until Mar. 2007 and slashed initial launch quantities due to a production delay in a key machine component.
Microsoft's Xbox 360 faced similar issues prior to its Nov. 2005. Production delays forced the software giant to release the machine in limited quantities. In addition, particular units encountered overheating issues.
New video game systems employ fast central processors that can generate immense heat. Sony's PS3 employs the Cell processor, a multi-core supercomputer chip that runs at 3.2Ghz. Microsoft's Xbox 360 boasts a three-core IBM PowerPC solution running at 3.2Ghz.
Nintendo's Wii video game system will feature cost-effective solutions and instead focus technology on an innovative wireless remote for new game experiences.