The next-generation home video game console is one of Sony's core products and its success against Microsoft's already-launched Xbox 360 is considered vital to its revival after a profit slump.

Sony decided to delay the launch from early 2006 because the copy protection technology for the DVD player has not yet been finalised, the Nihon Keizai business daily reported, without citing its sources.

Sony is using the next generation Blu-ray Disc technology - which is expected to have a greater storage capacity than rival format HD DVD - in the PlayStation 3 in the aim of making it a home entertainment centre.

A company spokesperson refused to comment on the report but said a press conference was scheduled for later in the day on the PlayStation.

Sony shares fell ¥90 or 1,62 per cent to ¥5 480 in morning trade as speculation grew that the PlayStation 3 (PS3) launch will be delayed.

"Considering production schedules at the Taiwanese makers to whom Sony is outsourcing production, an October-November launch now appears very likely," said Goldman Sachs analyst Yuji Fujimori.

"More important than the timing of the launch is what impact the PS3 will have when it debuts, which depends on the game line-up and pricing," he wrote in a note to clients.

Sony has long dominated the home video-game market and in November the group said its shipments of the PlayStation 2 console had topped 100 million since March 2000, including 22,2 million in Asia alone.

Microsoft aims to sell 5,5 million Xbox 360 consoles by July.

"A delayed PS3 launch would provide needed room for Microsoft to consolidate its early lead in fifth generation game consoles," Merrill Lynch analyst Joe Osha wrote in a report last month.

- Nampa-AFP

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