UPDATE 2-Nintendo cuts forecast as Wii loses sparkle

By David Dolan TOKYO, Oct 29 (Reuters) - Nintendo Co Ltd reported a 52 percent slide in quarterly profit on Thursday and slashed its full-year forecast, as the Wii console loses its title as the videogame console to beat. Demand for Nintendo's family-friendly games has cooled as rivals Sony Corp and Microsoft Corp bolster their catalogue of games that appeal to die-hard players. Nintendo's portable game player, the DS, increasingly faces competition from Apple Inc's iPhone, which has become a popular platform for handheld games.

And like other Japanese exporters, Nintendo has been hit by the stronger yen, which eats into overseas profits. The firm slashed its annual sales forecast for the Wii by nearly a quarter, and said it would roll out a version of the DS with a larger screen. But that is more of a "sideways move", instead of a real product advance, said Hiroshi Kamide, an analyst at KBC Securities in Tokyo. "A lot of what they're doing seems to be old hat, and therefore what we need to hear is more information about their ideas going forward," he said. "There is still life in the current platforms with the content they can generate themselves, but there is a need for the company to demonstrate that there are new products going forward." LOWER PROFIT Nintendo posted an operating profit of 64 billion yen ($709 million) in the July-September quarter, compared with 133 billion yen a year earlier. That was also lower than an average of 90 billion yen in a poll of four analysts by Thomson Reuters I/B/E/S. Reuters calculated the quarterly figure by subtracting Nintendo's first-quarter results from the first-half figures released on Thursday. Nintendo cut its operating profit forecast for the year to March 2010 by a quarter to 370 billion yen, ending a three-year run during which it booked a record profit on booming demand for its Wii console and DS portable device. Analysts are expecting a full-year profit of 442.8 billion yen, according to Thomson Reuters I/B/E/S. In September, Sony's Playstation 3 usurped Nintendo's Wii to become the top-selling U.S. video game console for the first time since its release, according to research group NPD. Shares of Nintendo finished down 1.1 percent ahead of the results. The stock has declined about 28 percent so far this year, compared with a 14 percent rise in the Nikkei 225 share average. (Reporting by David Dolan; Editing by Chris Gallagher) ($1=90.25 Yen) Keywords: NINTENDO/ ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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