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Last Updated: Friday, 7 October 2005, 14:58 GMT 15:58 UK
GameCube sale slump hits Nintendo
Nintendo's Game Boy Micro player
Nintendo faces fierce competition from Sony and Microsoft
Falling console sales and fierce price competition have dented profits at Japanese games manufacturer Nintendo.

Demand for its GameCube consoles has dropped off in the US, while sales of handheld Game Boy Advance consoles weakened in Japan and North America.

Sales fell 14% to 70.6bn yen ($62m) in the three months to June, with pre-tax income down 41% to 21.3bn yen.

Nintendo is banking on the success of its next-generation console, to be unveiled next year.

Tough competition

Increased research and development spending on the "Revolution" console - which will compete with new Microsoft's Xbox 360 and Sony's PlayStation 3 - ate into profits in the most recent trading period.

The leading manufacturer of handheld video gaming machines, famous for its Super Mario and Donkey Kong characters, had said early this year that profits would be affected by competition from Sony and Microsoft.

It looks like the product's (GameCube) life is nearing its end
Yoshihiro Mori, Nintendo

Sales of its GameCube and Game Boy Advance consoles were broadly unchanged on the previous quarter but were well down on the same period last year.

Nintendo sold 1.38 million of its portable DS console, launched at the end of last year.

However, it was forced to cut prices in both the US and Europe in the face of fierce competition.

Near the end

Nintendo said recently-launched games such as Nintendogs and Pokemon Emerald had performed strongly but admitted that its GameCube console had lost some of its desirability in the US.

"The big drop for GameCube games was in North America," Yoshihiro Mori, Nintendo's senior managing director, told Reuters.

"It looks like the product's life is nearing its end."

In light of its recent trading performance, Nintendo has reduced its forecast for full year sales by 4% to 500bn yen.

It has also lowered its estimate of operating profits for the year as whole by 22% to 90bn yen.

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