Sony expected to ship just 500,000 to 800,000 units before Jan 1st

NEW YORK (Reuters) - Electronic Arts Inc. (ERTS.O: Quote, Profile, Research) CEO Larry Probst said on Wednesday that initial shipments of Sony Corp.' s (6758.T: Quote, Profile, Research) new PlayStation 3 have been below his expectations due to shortages, though overall holiday sales thus far of video games and players were at or slightly ahead of targets.

His comments at the Reuters Media Summit in New York pushed down shares of EA, the world' s biggest video game publisher, by nearly 2 percent.

Probst said demand for Sony' s much-anticipated PlayStation 3 (PS3), which made its U.S. debut on November 17 for the critical holiday season, was strong but a shortage of supply meant that only about 200,000 units of the game console were sold at retail outlets.

Sony had originally aimed to ship 400,000 PS3 units for its U.S. launch, and has not given actual figures.

Probst said that EA had set a lower bar for initial shipments, but " where they ended up was a bit of a surprise."

By the end of 2006, he expects Sony to ship 500,000 to 800,000 units.

" We think they' ll get into that range," said Probst, who noted that console sales and corresponding game sales were typically slow to begin with because of supply constraints, and a clear winner will not be known for as long as five years.

This holiday season is crucial for the $30 billion global video game industry. Video game makers reap more than half of their annual sales in the end-year shopping season.

EA, whose games include titles like football game " Madden" and " The Sims," recently raised its 2006 outlook to call for flat to 5 percent growth in overall U.S. game sales. Previously, it expected overall sales to be flat to down 5 percent in 2006.

" That' s a much more optimistic outlook for the year than people were previously expecting," Probst said.