Nintendo 3DS launch to miss holiday shopping season

CHIBA, Japan Wed Sep 29, 2010 7:22am EDT

1 of 3. A model poses with Nintendo Co Ltd's new 3DS handheld game console in Chiba, east of Tokyo September 29, 2010.

Credit: Reuters/Toru Hanai

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CHIBA, Japan (Reuters) - Nintendo Co Ltd said on Wednesday the launch of its 3D-capable DS handheld game player will miss the busy year-end holiday shopping season, forcing Japan's leading game machine maker to slash its full-year profit forecast by one-third.

Nintendo will launch the new version of the DS on February 26 in Japan and in March in the United States, by far the biggest market for the game machine maker.

The company trimmed its projection for overall DS sales for the year to March 31 to 23.5 million units from 30 million and lowered its estimate for Wii consoles to 17.5 million machines from 18 million.

"At first we thought it would be desirable to launch the 3DS within the year, so we made our forecasts on that basis. At this point it is clear that if we launch within the year, we will not be able to supply enough units," Nintendo President Satoru Iwata told an analysts' conference.

SMARTPHONE THREAT

With sales of its DS and Wii fading, Nintendo is relying on the new 3D model to revive profits and help it fend of renewed competition from Sony Corp and Microsoft, whose motion-gaming peripherals will be on the market in time for year-end shoppers to buy.

Nintendo also faces growing competition from smartphones and other devices that can be used to play games.

"Without doubt, it hurts to miss the year-end shopping season," said Kazutaka Oshima, president of Rakuten Investment Management and an avid gamer.

"Game-only consoles are facing an increasingly uphill battle against smartphones like iPhones and other gadgets, since more people are playing games on them. But I think the 3D DS can attract people," he added. "It should be fun to watch Mario run and jump on a 3D screen."

Nintendo's Super Mario game franchise celebrated its 25th anniversary earlier this month.

The new 3DS created buzz when it was revealed at the E3 game show in the United States earlier this year, bolstering expectations that it would be the new hit product Nintendo needs.

Iwata said at the launch event that the new games machine, which can also be used to take 3D photos and view them without special glasses, will cost 25,000 yen ($298) in Japan.

That compares with retail prices of about 12,000 to 16,000 yen for existing DS models.

The pricier model, however, will come too late to prop up this business year's sagging profits.

Nintendo, also blaming a strong yen that has trimmed the value of its overseas earnings, cut its annual operating profit forecast by one-third to 210 billion yen ($2.51 billion). For the six months ending on September 30, the company now expects operating profit of 50 billion yen compared with an earlier estimate for 120 billion yen.

Shares of Nintendo dropped on the announcement of the DS release and ended trading down 3.7 percent at 23,010 yen.

Nintendo did not reveal the price or exact launch date for the 3D DS in the United States.

($1=83.80 Yen)

(Additional reporting by Tim Kelly and Taiga Uranaka; Editing by Edmund Klamann)

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