Ironically, on the PlayStation Web site, Sony refers to the PlayStation 2 as "the ultimate weapon in the universe."

The two governments are pointing to the PlayStation 2's DVD ability as being possibly helpful to China's military. Sony in July was to begin receiving up to 400,000 game units each month from two Taiwanese outsourcers, says a report from that country.

Asustek Computer and Acer, which are outside manufacturers for Sony, both planned to produce some of the game consoles at plants based in China. Asustek now uses its Chinese plant to produce bare-bones desktop systems for Sony. Acer, Taiwan's top PC maker, began production of computer components, including CD-ROM and DVD drives, in China last year, say reports.

Made In China

With more than 10 million units sold since the PlayStation 2 game console was unveiled in March 2000, Sony had hoped to use the two manufacturers in Taiwan to compensate for its own inability to meet manufacturing demand.

In addition, as Microsoft plans to manufacture its Xbox game console in Taiwan, Sony may have hoped to preempt a significant portion of Taiwan's manufacturing capacity before Microsoft had a chance to gear up there.

In December, a Web site reported that a scarcity of PlayStation 2 consoles was partly due to Iraqi dictator Saddam Hussein's use of the game machines. Some 4,000 of the game consoles found their way to Iraq, said the report.

While critics of the report doubted the practicality of linking hundreds of game consoles together to further a government's military ambitions, Michael Goodman, a senior analyst at Boston, Massachusetts-based Yankee Group, said the issue must be viewed a different way.

Chips Are Key

"Don't think of consoles, think of chips," Goodman told NewsFactor Network. "The danger is you are teaching [China] how to build" the processor, Goodman said.

Sony's 128-bit, 300 MHz "Emotion Engine" is equal to a mid-range Intel microprocessor, Goodman told NewsFactor. However, Goodman said it wasn't clear why Japan and the U.S. consider the PlayStation 2's DVD capability a threat. The PlayStation 2 does employ RSA (Nasdaq: RSAS) encryption.

Last December, with reports of Hussein possibly using the game consoles for military purposes, an unnamed military source was quoted as saying that the PlayStation 2's graphic capabilities were more powerful than those of a graphics workstation and far exceeded that found in typical PCs.

The PlayStation 2 also comes equipped with a broadband Internet connection, industry sources report.

Export Controls Eased

Before leaving office in January, President Clinton proposed lifting export controls on computer hardware. Then-Deputy Secretary of Defense Rudy DeLeon noted the ease with which rogue nations could connect a series of innocuous desktop PCs for use in military applications.

He concluded then that trying to control the export of technology by limiting hardware sales was not working.

At the same time, Japan lifted export controls for computer hardware, including the PlayStation 2. But in April 2000, Japanese officials restricted the export of the game console, saying its graphic processing unit could be used in guided missiles.