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Quote:

Game Group hit by PS3 delays

LONDON (Reuters) - Shares in video games retailer Game Group fell almost five percent on Wednesday trading after Sony <6758.T> said the launch of its new PS3 console had been put back to November.

"It's just bad news," said Teather and Greenwood analyst David Stoddart.

"If that (PS3 release) isn't going to happen they (Game) are left to rely on Microsoft's Xbox 360 and Nintendo's <7974.OS> Revolution and are going to be missing an important piece of kit and a reason for people to buy," he added.

By 11 a.m. Game shares were 4.91 percent lower at 77-1/2 pence valuing the firm at around 261 million pounds.

The stock has dropped more than 11 percent in the last month as speculation of possible delays has grown.

With the PS3 now set to hit shelves just before Christmas, analysts point out that European retailers may once again suffer from supply shortages for their key sales period as Sony's dominant Japanese and American markets get preferential treatment.

"They are talking about a launch in November but whether that is a simultaneous launch around the globe remains to be seen. I'm not counting on many (PS3s) reaching the UK or the rest of Europe come to that," Stoddart added.

He said retailers would also miss out on the expected income from new games for Sony's next-generation machine, which had been due to be launched this spring.

Ken Kutaragi, president of Sony's game division, blamed the delay on the belated finalisation of the copy protection technology standard for the Blu-ray Disc drive, a next-generation DVD player that will be included in the PS3.

He also said standardisation of digital audio and video technology to connect electronics devices was also late.

Sony is now also likely to go head-to head with Nintendo Co. Ltd.'s Revolution console, which is expected to hit markets around the same time.

Kutaragi said Sony planned initially to produce 1 million PS3 units a month for a total of 6 million units in the business year ending March 2007.

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