It could probably go either way, depending on a number of factors. A long waiting period could theoretically make people want to get the game even more as the hype for it can build up constantly over a long period of time. However, the wait can just as easily kill the hype, especially if the developer doesn't give frequent updates on the game's progress.
Other factors could be the announcements of other titles overshadowing the game, people simply forgetting the game after a while, the eventual quality of the game and whether it actually lives up to the extended hype, and various other things that can have an effect on sales.
"especially if the developer doesn't give frequent updates on the game's progress"
You mean like Half-Life 3...
I don't think Valve could kill the hype train if they wanted to.
But yeah, I pretty much fully agree, with everything in your post.
Well, Half-Life 3 has never actually been officially announced, so it doesn't quite apply to it. But yes, there are always going to be exception. I think the biggest problem HL3 will have if it ever actually is released is that it's practically impossible for it to live up to the expectations fans have built up for it over the last 10+ years.