IIRC, Toshiba had developed systems (both software and ‘hard’ products) that enabled the Soviets to mill their subs’ propeller blades such that they would be acoustically silent. Or, at least, so quiet when they turned that they could not be picked up/tracked. In other words, one of the US’s key abilities to track Soviet nuclear missile subs could have been severely compromised, i.e. the balance of nuclear power could have been shifted (admittedly slightly) toward the Soviet side.
I would suspect that that story is an urban legend, though I don’t know for sure. I do know that game systems are (or have been) on the restricted hardware list for export, since they are considered “dual use.” You could write a software package for a Playstation that guides a missile based on inputs from other hardware (IR detector, etc).
But Hussein’s Iraq was definitely on the “don’t send stuff here” list. He could have gotten them from Russia or something, but if he’s going there, he could have probably gotten more useful (maybe even purpose-built) hardware from arms dealers.
No. But knowing full well why the Soviets wanted the system, and despite a Japanese trade embargo that prohibited exporting such equipment to them, they went ahead and sold it to the USSR regardless. Nice link.