Sony PS3 vs. Xbox 360: Which Software Glitch is Worse?

Sony (SNE) announced today that a Y2K-type error was causing most PlayStation 3 units to reset to January 1, 2000, kick users off, and lose data. People even found that they couldn’t run games they had downloaded, even if they were offline when they tried.

The only exceptions are the slim new PS3s that came out in September. Sony has been warning users not to turn on PS3s until it can issue a software fix, which it claims will come within 24 hours.

This is anything but good news for Sony, which was just starting to recover its standing in the gaming console market. even having sold tens of millions of units, until the fall it remained behind Nintendo and Microsoft (MSFT). the new form factor of the PS3, along with a new lower price, helped fuel the resurgence. but news like this will likely hurt sales, though by how much it’s impossible to say.

That said, it could be much worse. Microsoft’s (MSFT) Xbox 360 has had noted hardware problems that cost $1 billion and that required Microsoft to extend the warranty on units. If Sony’s problem is in the PS3 firmware and a software fix works, chances are it can avoid massive recalls that would put even more pressure on a product line that has lost the company tremendous amounts of money. And, anyway, at least they won’t have a problem knowing which systems need a fix.