Duty row over new-era games console

PlayStation 2: if classified as a video game it will attract 2.2% import duty

The PlayStation 2 console - is it a video game or a computer?

That is a multi-million dollar question as far as manufacturers Sony are concerned.

And the electronics giant has demanded talks with UK customs officials who, after weeks of 'evaluation', have bracketed it, like its predecessor, as a video game.

The ruling means PlayStation 2, which is being launched in Europe on 24 November, will attract an import duty of 2.2%.

Customer guarantee

Classified as a computer, the console would be importable levy-free.

We feel PlayStation 2 is different. We are now are going to be requesting a review of the decision

Liz Ashworth, Sony Computer Entertainment

And that 2.2% difference could mean a large hit for Sony, which has guaranteed to keep the system's recommended retail price at £299 in the UK, or 2990 francs in France, and expects to sell 3 million consoles in Europe, the Middle East and Australia by March.

"We are disappointed by the decision by Customs & Excise," Liz Ashford, PR director for Sony Computer Entertainment Europe, told BBC News Online.

"We feel PlayStation 2 is different. We are now are going to be requesting a review of the decision."

EU-wide impact

The UK classification is made more acute through its applicability throughout the European Union.

"The decision obviously will have an impact if it is upheld. We will have to tighten our belts," said Ms Ashford, although she said it had few implications for the profitability of Sony as a whole.

Sony officials are now preparing to represent PlayStation to Customs & Excise, which assessed the console on four major criteria, including programmability.

While Ms Ashford declined to detail Sony's case ahead of the hearings, advances included in Playstation 2 include a 128-bit microprocessor, dubbed the "Emotion Engine", a player for digital video discs (DVDs), and the ability to log onto the internet.

Best seller

The system is a successor to the PlayStation games console which has sold more than 75 million units since it release in 1995, also at £299. Current versions retail at about £79.

More than 3.5 million PlayStation 2 consoles have already been sold in Japan, where it was launched in March.

And in the US, where it was released last month, the 500,000 units on offer were sold on the weekend it was launched, Sony said.

One system sold on through auction site eBay on 30 October went for £14,999.

"We were quite amazed," Ms Ashworth said.