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Video game console shortage could linger into '07

LOS ANGELES (Reuters) - Shoppers are standing in lines to snap up Sony Corp's PlayStation 3 and Nintendo Co. Ltd.'s Wii video game consoles as they become available, and some analysts do not expect shortages to ease until March or later.

Shoppers are finding lots of PlayStation 2s and Microsoft
Xbox 360s, expected to do well as substitutes for the newest machines that are in short supply.

One employee at a Target store said the retailer issues a memo a couple of days in advance of Wii and PS3 shipments and passes the information on to shoppers, who sometimes stand in line to secure their booty.

As he spoke, shoppers snapped up PlayStation Portables and Apple Computer Inc.(Nasdaq:AAPL - news) iPods.

American Technology Research analyst Paul-Jon McNealy said that since Sony (6758.T)(NYSE:SNE - news) shipment numbers include units in transit or in warehouses, the company's target of 1 million could translate to 600,000 to 800,000 units at retail by year end.

McNealy said investors and game makers tempered their forecasts for the PS3s since initial numbers fell short. He added that the PS3 will likely remain scarce through the June quarter.

"They have to launch in Europe, and they're stretched," said McNealy.

Wii shortages could ease in the March quarter, he said.

Workers at a dozen Southern California stores, including Best Buy (NYSE:BBY - news), GameStop (NYSE:GME - news) and Target (NYSE:TGT - news) outlets, said PS3 shipments were small and sporadic this shopping season, ranging from as few as 1 or 2 to 25, and that shoppers snapped up consoles as they arrived.

"We get 1 or 2 every week to week and a half," said a weary Los Angeles GameStop employee.

Nintendo's (7974.OS) Wii was selling out fast but reaching stores in greater numbers than the PS3, store clerks said.

The $250 Wii, known for its motion-sensitive controller that can be swung like a tennis racquet or a sword, and the high-end $600 PS3 both launched in the United States in mid-November and take on the year-old Microsoft Xbox 360 in the new generation video game console battle.

Sony's PS2, which has sold more than 106 million units globally, is expected to be a top seller this season.

Toys "R" Us said its 587 U.S. stores expected more than 6,000 PS3s, thousands of Wiis and over 30,000 Microsoft Corp. (Nasdaq:MSFT - news) Xbox 360s in the week leading up to Christmas.

Lisa Baertlein
reuters.com

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Microsoft Offers One-Year Warranty for Xbox 360

When a new video game platform comes out, there are problems. Whether the issue is games freezing, sound problems, Internet connection or compatibility issues, gamers and consumers can spend hours sorting out these difficulties.

Now, Microsoft appears to have taken a step in the right direction to lessen these issues for users of its
Xbox 360. On Dec. 22, the Redmond, Wash., company announced that it will change the Xbox 360's warranty from 90 days to one year from the date of purchase in the U.S. and Canada.

By expanding its warranty offer from 90 days to one year, Microsoft will give its North American customers the same guarantees and hardware protection the company already offers to Xbox 360 users in other parts of the world.

Microsoft officials could not be immediately reached for comment about the announcement. The company has said that there have been ongoing issues and problems with some of the hardware used in the Xbox 360.

In September, Microsoft told IGN Entertainment online that there were problems with many of the consoles that were made before Jan. 1, 2006. As a result, the company offered refunds to customers who had already paid for repairs.

With the new warranty extension, Microsoft has promised customers who have already paid out-of-warranty repair charges within the first year of owning an Xbox 360 that they will receive reimbursements within 10 weeks.

Microsoft is not the only console maker experiencing problems with hardware. PlayStation 3 and Nintendo Wii are also having issues with their platforms such as sound, compatibility and Internet connections. As a result, Sony and Nintendo have also offered expanded warranties as way to address the concerns of their own customers.

IGN reported in November that the PS3 was having compatibility issues when it comes to running select
PlayStation 2 titles such as Tekken 5, Devil May Cry and Gran Turismo.

Click here to read more about the Xbox 360.

IGN has also reported that there have been hardware problems with PS3, such as physical memory cards, multitaps and USB specifications, which have created problems when trying to use PS2 games on the PS3.

In order to fix these problems, IGN reports that Sony plans to make hard disk-based PS2 games compatible in a future system software update.

Users of the Nintendo Wii have also been reporting issues with their platforms on the Nintendo Wii Chat Web site, such as the Wiimote disconnecting, problems with the Internet connection, sound issues and the system freezing on the screen.

One Wii user wrote of problems with the console's sound.

"After playing for a bit, the audio goes full FUZZ. Static if you will," the user, who goes by the name CasopoliS, wrote on the site.

Check out eWEEK.com's Desktops & Notebooks Center for the latest news in desktop and notebook computing.

Patrick Hoffman - eWEEK

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