GAME maker Nintendo has reported a 37 per cent decline in profit for the financial year to March as sales of its GameCube console fell short of target.

Nintendo, which makes Pokemon and Super Mario games, earned ¥67.3 billion ($873 million) for the financial year ended March 31, down from ¥106 billion the previous year.
Sales totalled ¥504 billion, down 9 per cent from ¥555 billion a year earlier. Nintendo generated 75 per cent of its sales overseas.

Since going on sale in 2001, GameCube has lost ground to PlayStation 2, the rival machine from Sony, which has emerged the global leader in the sector.

As of March 31, 9.55 million GameCube machines have been sold around the world - short of Nintendo's goal of 10 million and far below the 51.2 million PlayStation 2 consoles shipped worldwide so far.

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Nintendo is about to face competition from Sony in portable game machines as well, where its Game Boy has dominated. This month, Sony announced it will introduce its own handheld, the PlayStation Portable, next year. It did not show a prototype or give a price.

Nintendo has sold 33.8 million Game Boy Advance machines so far, including 15.7 million in the 2002 financial year.

The arrival of a Sony portable is a big threat to Nintendo at a time when it is counting on Game Boy Advance sales and hoping to sell games that link the Game Boy Advance with the GameCube, said Takeshi Tajima, analyst at BNP Paribas in Tokyo.

"Trying to prevent GameCube from dying out is the only strategy left for Nintendo," he said. "When the gap in market share is this great, a rally from behind is virtually impossible."

Nintendo is forecasting even lower profits at ¥65 billion for the fiscal year ending March 31, 2004. It predicts sales will improve to ¥550 billion.

In fiscal 2002, Nintendo fared better in selling game software than in selling machines.

It sold 59 million games for Game Boy in fiscal 2002, up 26 per cent from 47 million a year ago. It sold 46 million games for GameCube, about triple the 14 million in fiscal 2001.

Nintendo officials have said they no longer hope to compete in making more sophisticated machines. They want instead to make fun software, an effort that won't cost as much but can produce profits.

"It is becoming increasingly more difficult to create new and unique games which utilise the full capabilities of new hardware," Nintendo said in a statement.

"Pocket Monsters Ruby and Sapphire" sold well, proving that Pokemon games remain strong products, it said.


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