Due to an international agreement signed by DVD-player manufacturers and film companies, it is illegal in Japan to play back the content of DVDs sold overseas. In light of the serious bug in current PlayStation2 consoles, SCEI has had to ask owners to return the relevant software by mail by April 1 and, following that, through Seven-Eleven convenience stores nationwide.

A presumably downcast SCEI official said, "Production of replacement software and its mailing will cost us substantially." PlayStation2 consoles will now ship with software that does not support the playing of foreign DVDs.

The Real Details:

• Sony's getting off easy:
  The word recall inspires dread in the heart of companies, but for Sony, this is just about as easy a recall as could be imagined. Production of each disc (in the PlayStation CD format) costs about $0.20 to $0.25. If you add handling costs and other extras, the cost of the recall could conceivably climb as high as $1 million. That's not bad considering Sony's overall investment and initial loss on the console. This is just a fraction of the cost of a hardware recall.
• This move is a legal move, not a customer service move:
  This recall is a direct response to the legal actions taken by the film industry. Sony knows that part of the DVD agreement is to protect regional lockouts, and it must legally fix the bug that lets PS2 owners watch foreign DVD movies. By recalling the utility discs, Sony has discovered a relatively cheap way to get the lawyers off its back.
• This may not be the last recall:
  Even though Sony found a cheap way to fix the problems with regional lockouts, the company is now answering allegations that the PS2 enables VCRs to tape DVD movies. This cannot be fixed with a simple utility disc upgrade, and Sony is still liable for fixing the problem.

How it will affect the US launch:

• Our PS2 will be different than the launch PS2:
  Even though both versions of the PlayStation2 will be essentially the same, every bug that pops up in the first two or three waves of Japanese units will be fixed before the US launch. This is standard operating procedure for consoles, however, so it's not a problem. Remember, Sony has released more than 20 different individual models of the PlayStation.
  
• The current recall will not create shortages:
  Sony can produce utility discs very quickly and cheaply, so this will not affect the company's US launch plans in the slightest. However, Sony will surely test the drivers more thoroughly before unleashing them on the US public.
  
• If a hardware recall takes place, we could see shortages:
  This is an unlikely occurrence, but if the film industry forces Sony to recall PS2 hardware, it would push back the company's production schedule so badly that the US launch would be affected.