"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." [more]