Ageing Wii needs a clever successor

Nintendo will launch a successor to its ageing Wii game console next yearto win back users lured away by rivals Microsoft and Sony - and reverse a fall in profits.

The maker of the DS hand-held games device, which is also facing competition from smartphone makers including Apple, said yesterday it would demonstrate a prototype of the new Wii in Los Angeles in June at the E3 game show.

Nintendo wants to repeat past successes in the gaming market.

The Wii took the industry by storm five years ago by offering family games such as tennis and bowling that appealed to nontraditional gamers.

But this time Nintendo will find it harder to sidestep its competitors and must also contend with a burgeoning smartphone market that did not exist in 2006, said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

"Core users and game lovers will certainly buy it, but I think it will be hard to capture buyers outside that group," he said.

Yesterday, Nintendo also reported its second straight fall in annual profit as demand for the Wii games console fell. Having sold 86million units since launching in 2006, sales last business year slipped by 5 million units to 15million.

Nintendo declined to provide further details of the new Wii but CEO Satoru Iwata said it would offer "a new way of playing games".

Nintendo launched a glasses-free 3D-capable hand-held games device, the 3DS, this year, to fend off increased competition from other game console and smartphone makers. It must also contend with Microsoft and Sony, which have brought new products to the market since the Wii's debut.

In March, Microsoft said it had sold more than 10million Kinect motion-sensing game system units worldwide in about four months, making it the fastest-selling consumer device on record. The infrared camera add-on for the Xbox game console tracks body gestures for video games.

Sony's rival motion-sensing device is dubbed Move.

In the business year just ended, Wii console sales fell to 15.1million units from 20.1million a year earlier. It expects sales to fall by a further 2million units this business year.

Sales of its non-3D hand-held DS shrank by almost 10million units to 17.5million, and the company expects that to slide to 11million this term.

Nintendo' operating profit fell 52% to $2.09-billion in the year ended in March, well below a Thomson Reuters SmartEstimate of $2.45-billion.

SmartEstimate puts more weight on recent forecasts by highly rated analysts.

Nintendo expects operating profit of $2.13-billion for the year to March 2012.