Joystick issue - picade 10’’

I need your help with the Picade 10’’. I just bought and assembled the system with PI4 and Retropie. However joystick is behaving really strangely… While running configuration, it does not register at all for the up/down/right/left direction, but when selecting up+left it registers as DOWN; up+right registers as RIGHT. No registration for down+left or down+right…
Buttons seem to work, power button works.
When I start the RetroPie I have no sound…

Any idea what could be wrong?

Thanks for your help!