Sony Corp. had billed PlayStation 3 as compatible with the previous PlayStation machines.
The news comes just three weeks after the Japanese technology firm posted a 94 percent dip in its third quarter profits, due to both $429 million in unexpected costs from a and weak performance in its video game business.
Sony's executives last month apologized for the inconvenience caused by the global recall of 9.6 laptop batteries, but said no resignations were necessary because the problem has been fixed by new quality control procedures.
Announcing the PlayStation 3 problem at a Tokyo news conference Tuesday, Sony Computer Entertainment spokesman Satoshi Fukuoka said some of the brand's 8,000 older games don't work properly on PS3, making the wrong sounds or images, and some cannot be played at all.
He declined to give a number for the games that weren't functioning, but he said the same problem is expected when the game console goes on sale in the U.S. Nov. 17. About 16,000 different games have been sold for the PlayStation and PlayStation 2 in North America.
Fukuoka said the problems in playing the older games are not a glitch and had been expected. Sony announced the problem on its Japanese Web page Nov. 11, the day when the PS3 went on sale to lines of eager fans at Japanese retailers.
Users can punch in the name of the PS or PS2 game on the Web page, and a list will pop up, telling you if the game can be played without problems or not.
For example, all the "Biohazard" series games can be played without problem, except for one in which a virtual gun won't fire properly, according to Sony's Web page.
"We are sorry for the game fans that they cannot play all the games," Fukuoka said. "But unfortunately, some of these problems could not be avoided."
PlayStation 3 is facing off in a three-way console war for this Christmas against Nintendo Co.'s Wii, which goes on sale Nov. 19 in the U.S., and Microsoft Corp.'s Xbox 360, which had a year's head start over rivals.
Although response has been enthusiastic to the PS3, the launch hasn't been smooth.
Production problems meant that only 100,000 PlayStation 3 machines were in time for its debut in Japan. When it goes on sale in the United States on Nov. 17, some 400,000 PS3 consoles will be available there.
The console's European launch has been pushed back until March. That was the second delay, as PS3 had been initially promised for spring of this year.
Sony has a lot riding on the success of the PS3, which is powered by the new "Cell" computer chip and supported by the next-generation Blu-ray video disc format.
But Sony will be losing money for a some time because of the high costs for research and production that went into the highly sophisticated machine.
The red ink is coming at a time when the Japanese electronics and entertainment company, known for the Walkman portable audio player and "Spider-Man" movies, is struggling to stage a comeback.
In recent years, Sony has fallen behind in key products like flat-panel TVs and digital music players. A fumble in its PS3 business could prove a huge blow at a time when it is seeing its brand image badly tarnished by a massive global recall of lithium-ion batteries for laptops.