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Nintendo projects flat outlook for game console sales

May 7, 2009 |  2:20 pm
Nintendo says sales of its consoles are expected to be flat this year. Credit: Jeff Chiu / Associated Press

Has the console cycle hit its peak? Nintendo, the sales powerhouse of the current generation of video game consoles, today projected stagnant or declining sales for its Wii and DS systems.

Nintendo said it expects to sell 26 million Wii consoles and 30 million DS hand-held consoles during its current fiscal year, which started April 1. The Japanese company sold 26 million Wiis and 31 million DS units last fiscal year, ended March 31.

On the bright side of the ledger, Nintendo said software sales for those devices were likely to increase, thanks to the growing number of consoles in people's homes. The company projects it will sell 220 million Wii games this year, up from 204 million last year. DS games, however, are expected to drop 9%, to 180 million from 197 million.

The console cycle refers to the period that starts when new consoles hit the market and ramp up to when sales slow down and companies begin dreaming up faster, better machines for the next generation.

Colin Sebastian, an analyst with Lazard Capital Markets, thinks Nintendo isn't off its game. Instead, he says, the company is being conservative and hedging against two wild cards: a hazy economic outlook and currency fluctuations, particularly the strong yen, affecting sales of its products abroad.

Nintendo didn't do too badly last year. The Kyoto company's sales jumped 10% to 1.8 trillion yen, or roughly $18.2 billion. Profit grew 8.5% to 279 billion yen, or $2.8 billion.

-- Alex Pham