Sony has been preparing its Next Generation Portable for a head-to-head battle with the recently-released Nintendo 3DS, but the earthquake and tsunami in Japan maybe forcing a change of plans.

"It may be the straw that says 'maybe we get to just one market by the end of the year,'" SCEA president Jack Tretton told Bloomberg. Citing production problems, Tretton suggests the portable may only launch in one of the three territories (Asia, Europe, or the U.S.) this holiday season, and save the other two for 2012.

The earthquake and tsunami has forced Sony to halt production at several factories in northern Japan. Some factories that are still in operation are having difficulty with component suppliers that also felt the effects of the disasters.

Tretton says that the delay may give developers more time to complete their software, which would build a stronger launch library. Analysts agree that this might help in unexpected ways. "Third parties carry more weight for the Sony platform and are going to need more time for development, so the medium-term view is more important for NGP than how it gets out of the starting block," said MF Global FXA Securities analyst Jay Defibaugh.

On the other hand, it puts the system at a disadvantage in the race with the 3DS, which will have even more time to establish an install base. "It raises the bar on the competitive issues that Sony is going to have to hurdle," said Edward Woo of Wedbush Securities. "As it is now, it's already going to be almost eight months behind Nintendo, and a delay could push that to a year."