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Last Updated: Thursday, 25 May 2006, 06:33 GMT 07:33 UK
Nintendo warns of weaker profits
Nintendo Wii and controllers
Nintendo's new Wii console will be launched before Christmas
Nintendo has posted a 19% drop in annual profits and warned that results for its current financial year will be weaker than previously expected.

For the year to 31 March 2006, the Japanese games console maker made an operating profit of 90bn yen ($799m; 427m), down from 112bn yen.

Nintendo said profits for its current year should come in 3.5% below existing market expectations.

It is due to launch its latest console, the Wii, before key festive trading.

'Dashed expectations'

The firm's sales for the past financial year fell 1.2% to 509bn yen, hit by falling demand for its outgoing GameCube console and supporting games.

Strong sales of its DS handheld and titles such as Nintendogs failed to make up for the shortfall.

It is planning to launch the Wii console in the final quarter of the year, competing against Microsoft's Xbox 360 and Sony's PlayStation 3.

At a news conference in Osaka, Nintendo senior managing director Yoshihiro Mori said the Wii would sell for 25,000 yen ($220) or lower in Japan and $250 (133) or lower in the US.

The Japanese games giant said it aimed to sell six million consoles by March 2007.

Annual net profit rose 12.5% to 98bn yen, but that was thanks in part to a large currency gain.

Nintendo's shares ended Thursday trading down 8%.

"I think the share price fall is really a case of expectations being high and investors selling after having seen what they came to see," said Tatsuo Nishimura, portfolio manager at Meiji Dresdner Asset Management.

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