As crowds lined up for the first time in stores across Japan this weekend for the highly anticipated Sony Playstation 3 gaming console, many prospective buyers were disappointed by quick sellouts, even as the company expects to struggle in meeting demand well into next year.

Bic Camera in downtown Tokyo and other select local retailers who faced eager buyers are some of the few to receive the limited supply of consoles. Plagued with production problems, Sony issued a series of unit-target cuts throughout the year, finally delivering 100,000 units to Japan this weekend.

Some observers have speculated that the problems stem from the unit's complex technology, which includes the console's advanced Cell processor co-developed with IBM and Toshiba. Last month, however, Sony executives pointed elsewhere.

Speaking at the Tokyo Game Show, president of Sony's Computer division Ken Kutaragi said that a lack of parts was hampering manufacturing, not technical difficulties.

Right now...we can't manufacture enough blue laser diodes for our PlayStation 3s. he said, but we will resolve that.

The high frequency light produced by the diodes is needed to power many of tomorrow's upcoming consumer devices, such as HD-DVD players and the Blu-Ray disc technology - the same media used in the Playstation 3.

Other Blu-ray makers have delayed launches, partly due to a shortage of blue laser diodes, market research firm, iSuppi said in a recent report. Nichia Corp., the primary supplier and technology licensor of blue laser diodes for Blu-ray, has reported manufacturing yield problems.

Sony has licensed the technology from Nichia for volume production, iSuppli commented, however they too are reporting yield problems, slowing Playstation 3 production.

Kazuo Hirai, chief executive of Sony Computer Entertainment America, said about 400,000 units will be available in the U.S. in the initial launch and an additional 600,000 by the end of this year. Sony hopes to have a total of 2 million consoles in the U.S. market by the end of company's fiscal year, which ends in March.

We see a risk of a slight undershoot, Merrill Lynch research analyst Hitoshi Kuriyama said. Although process yields appear to have been improved for blue lasers, the main cause of production delays, we still have not heard that PS3 has started full production.

In contrast to Sony's predictions, the firm lowered its estimate for Playstation 3 production to be nearly 1.5 million units at best.

Manufacturing Ibm Electronics Sony