Hmm, tough question. Releasing early can help, but it's never been decisive in any console release cycle. That said, you could argue the 2005 launch did end up inadvertently hurting Microsoft. The reason is that back in 2005, it made much more sense to go with DVD storage. DVD had become a mass format only in 2000, and only a few tech engineers were talking about next-gen formats.
By late 2006, it was clear to anyone who read the biz press that the DVD market was saturated, and affordable HDTV was going to become dominant by 2008. But by then, Microsoft was locked into DVD -- and permanent technological inferiority vis-a-vis Sony -- for good.
I think waiting until 2006 also benefited Nintendo: it gave them time to reduce the cost of the console to something instantly affordable. Launch in 2005, and the price tag would've been $350, and sales would've been much slower.
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