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Nintendo profits fall short of estimates

Visitors try out the new Nintendo 3DS handheld gaming device with a 3D display at the Nintendo DS stand at the CeBIT technology trade fair.

STACEY VANEK SMITH: Toyota reported a massive hit to production following the earthquake. The Japanese carmaker said today output plunged 30 percent. Honda's output has been cut in half.

It was a tough quarter for another Japanese company as well. Nintendo reported profits down 66 percent -- the game-console maker wasn't hurt directly by the earthquake but has been hit by some new competition.

From Tokyo, here's the BBC's Roland Buerk.


ROLAND BUERK: Nintendo needs to power up its slumping sales. In its earnings report, the company reports says profits have fallen by two-thirds in the past year. Plus there's the looming threat of smart phones which offer much cheaper, more portable games.

Jay Defibaugh is an analyst with MF Global.

JAY DEFIBAUGH: It's an issue for Nintendo as well as Microsoft and Sony -- the idea that you can buy a quality game for $1, or $2, or $5. Versus what Sony, and Microsoft and Nintendo would rather have you do -- buy something for $40 or $50 or $60.

Nintendo says one way it hopes to stay ahead of the competition is with the first handheld 3D device you don't need 3D glasses to use -- the 3DS. The device went on sale late in February, so we won't find out how well that's been doing until Nintendo's next profit report.

In Tokyo, I'm the BBC's Roland Buerk, for Marketplace.

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