Shares of video game publishers THQ Inc., Take-Two Interactive Software Inc., Activision Inc. and Electronic Arts Inc. were down on Friday, after Microsoft Corp. cut its Xbox 360 video game console shipping target for its fiscal year ending June 30.

Microsoft (MSFT) executives said Thursday that due to unsold inventories in stores, they expect to ship a total of 12 million Xbox 360s by the end of the fiscal year in June, down from their previous target of 13 million to 15 million.

"Video game publishers will be under pressure today after Microsoft cut its life-to-date shipment ... There is investor concern about a re-set of expectations around both the Xbox 360 and the Sony PlayStation 3," American Technology Research analyst Paul-Jon McNealy said in a client note.

THQ (THQI) was the hardest hit, with shares falling 4 percent, or $1.25, to $30.48, while Take-Two (TTWO) dropped 40 cents, or 2.3 percent, to $16.84, both on Nasdaq.

Electronic Arts (ERTS), the world's biggest video game publisher, was down 1.7 percent to $48.04, and Activision's (ATVI) stock was off 2.3 percent, or 41 cents, to $16.71, both on Nasdaq.

On Thursday, Activision said third-quarter revenue and earnings would beat Wall Street estimates, but those results for the fourth quarter ending in March would miss analysts' targets.

It cited the delay of PC title "Enemy Territory: Quake Wars" and expenses related to an ongoing internal review of its stock option practices dating back to 1992.

Activision's option grant practices are also the target of an informal U.S. Securities and Exchange Commission inquiry.

The company said it believes it will be forced to book additional charges related to its options grants, which would result in restating results in certain quarters.

"The other risk that remains is a possible change of some management, including Chairman and CEO Bobby Kotick, as a result of the findings of the investigation," said McNealy, the analyst.

The $30 billion video game industry is in a new console technology cycle that has sent ripples through the market.

Microsoft launched its Xbox 360 in November 2005. Sony Corp. (SNE) and Nintendo Co. Ltd. followed a year later with the PS3 and Wii, respectively.

The Wii has surpassed expectations and propelled software sales at companies like France's UbiSoft Entertainment SA, which has concentrated on making games for Nintendo's new console.

Sony said it met its target to ship 1 million PS3 consoles to North America by the end of 2006, but did so by diverting supplies from Japan.

While the Wii remains sold out and hard to find, consumers have been spotting Sony's PS3 on store shelves, giving rise to concern that demand for the market leader's new console is soft.

Sony is scheduled to issue its financial report on Tuesday and is expected to give details about PS3 results.