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Nintendo's earnings slumped during the Christmas quarter, the videogame pioneer revealed today, despite a small year-on-year increase in sales.

For the three months to 31 December - Nintendo's third quarter of FY2005 - the company's sales reached ¥231.4bn ($2.22bn), up 1.4 per cent on the year-ago quarter's figure, ¥228.2bn ($2.19bn).

However, net income fell over 43 per cent from the ¥37.4bn ($359.3m) reported this time last year to ¥21.3bn ($204.6m), a figure calculated by subtracting the company's published first-half earnings from the nine-month total it reported today.

Nintendo blamed the decline on slow sales of its Nintendo DS titles, falling demand for the ageing GameCube and the strength of the yen over the US dollar.

DS software may be proving hard to shift but the handheld console itself has proved something of a success. Nintendo said it had shipped 2.84m of the machines to the US and Japan since its late November launch. It also upped its forecast for the number of units it will have shipped by 31 March, the end of its current fiscal year, from 5m to 6m.

However, it now expects to ship 10m copies of DS games by the same date - well down on the 15m it forecast in November 2004. To date it has shipped 5.01m copies, Nintendo said. In the first nine months of FY2005, it shipped 72.6m GameBoy Advance SP titles, up from 61.5m this time last year. GBA unit shipments were up too: from 13.2m last year to 13.6m.

However, GameCube shipments slumped. Some 3.5m consoles shipped in the nine months to 31 December 2004, down 20 per cent on the same period last year. Analysts attribute the decline to a lack of popular games.

Nintendo said it now expects to sell 4m GameCubes in the year to 31 March, down from its previous forecast of 4.5m units.

It also cut is full-year income forecast to ¥70bn ($672.5m) from ¥90bn ($864.6m), a reduction of just over 22 per cent, and its sales forecast from ¥540bn ($5.19bn) down 3.7 per cent to ¥520bn ($5bn). ®

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