Sony has admitted it has yet to begin manufacturing its PlayStation 3 console even though the machine is due to go on sale in three months.

Speaking to Gamespot, an American website, Sony Computer Entertainment America president Kaz Hirai said: "We haven't started manufacturing yet."

The company is currently "preparing... to get manufacturing going" he added.

Sony confirmed to The Times that production was yet to get underway but said that the company still planned to have 4 million of the machines ready for the key Christmas period.

The news follows the recall last week of more than 4 million Sony batteries that were supplied with Dell laptops.

In April, Sony sounded a warning over costs associated with the PS3, which is likely to be pitted against much cheaper competitors from Microsoft and Nintendo.

Takao Yuhara, senior vice-president at Sony, said: "We believe that we can lower costs dramatically [on the PS3] through chip shrinkage and by cutting the number of parts but there is no way to avoid high costs in the first year."

Together with continuing restructuring costs linked to 10,000 job cuts and several factory closures, the PS3 launch is expected to cut Sony profits almost in half this year.

Sony said group operating profits for the current financial year are expected to fall 48 per cent to ¥100 billion. This is well below analysts' expectations of around ¥170 billion.

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