Microsoft recalls Japanese Xbox

UPDATE: The media misinterpreted information found on the Japanese Microsoft Xbox website. Turns out the following is untrue. See the updated news article: Microsoft issues correction regarding Japanese Xbox recall

Microsoft Corp. is recalling the Xbox video-game console in Japan because of a defect two weeks after its debut in the country, setting back its entry into the home turf of rivals Sony Corp. and Nintendo Co.

Some of the 250,000 consoles shipped in Japan make scratches on the perimeter of a game disk, said Microsoft Co., the Japanese unit of the world's biggest software maker. The recall comes a week before the console's debut in Europe on March 14.

Xbox debuted in Japan on Feb. 22 with Microsoft Chairman Bill Gates distributing the first Japanese-version to a 22-year-old student, the first among hundreds of customers lined outside a video store in Tokyo's Shibuya shopping district. The recall will hurt the company's attempt to wrest market share from Sony's PlayStation 2 and Nintendo's GameCube game consoles in their home market, investors said.

News source: Bloomberg.com