Analysts mostly upbeat, third-party publishers' shares spike on news that the next-generation console will arrive in time for the holidays.
If you were a third-party publisher spending tens of millions developing a PlayStation 3 game, the last few weeks must have been pretty nerve-wracking. As the year has progressed, more and more analysts and industry insiders were predicting that the next-generation console would miss its spring 2006 launch date and instead launch in the fall. With Sony staying resolutely mum on the matter, some analysts went one step further, saying the PS3 might not launch until 2007 in the US and Europe--missing the all-important holiday season.

So when Sony announced earlier today that the PS3 will go on sale worldwide in November, many major publishers breathed a sigh of relief. So, too, did their stockholders. On the Nasdaq, Electronic Arts gained $1.51 (2.85 percent) to hit $54.38, Activision rose $0.72 (5.5 percent) to $13.93, THQ jumped $1.06 (4.3 percent) to $25.9, and Take-Two Interactive rose $0.42 cents (2.6 percent) to $16.69.

For its part, Sony's stock rose on the New York Stock Exchange, adding $0.17 (0.37 percent) to close at $46.63. However, the announcement came after the close of the Japanese Nikkei market, on which Sony stock slid 1.8 percent to end the day at 5,470 yen ($46.57).

Overall, most major investment firms' analysts were pleased with the PS3 delay and Sony's other big announcement, a price drop for its PSP. "We view a worldwide November launch as positive," UBS' Mike Wallace said in a report. "In our view, recent fears that the PS3 launch might have been delayed until as late as 2007 have been overblown. The European launch is earlier than expected, as we had been expecting a launch in Europe in Q1 2007."

"While this launch date is a delay for Japan, it is a clear positive for our U.S. publishing stocks, given recent speculation about a possible pushout into Q1 2007," said Shawn Milne of Friedman Billings Ramsey. Milne also pointed out Sony's supply projections as boon. "Sony indicated that it expects 1 million unit monthly production capacity at launch and 6 million units by Q1 2007 (well above Microsoft’s Xbox 360 target of 2.5M in its first 90 days). We were expecting 500k-1M at launch in 4Q for the US."

However, analysts warned of similarly bumpy retail road come November. "We think the PS3 launching this year is good news longer-term for the game stocks, but near term, the limited hardware quantities could lead to some earnings misses in Q4 this year," said Wallace. Milne was blunter in his assessment. "We expect shortages and another choppy holiday," he said, adding, "this is clearly not going to be a cheap box ($400-$500 likely)."

However, some analysts were less upbeat about the PS3 delay. One analyst who wished to remain anonymous said that the move is "giving its rival, Microsoft's Xbox 360, a two-holiday season advantage." Hiroshi Kamide, analyst at KBC Securities in Tokyo, told Reuters that the delay could come back to haunt Sony. "The Xbox 360 will now have had a year's head start," he said. "The danger is that [Microsoft] could target big-hitting titles at the launch of the PS3 just to sabotage it."