Nintendo, the world's biggest maker of handheld video-game players, had a 5. 5 percent drop in second-quarter profit and cut its sales forecast...

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Nintendo, the world’s biggest maker of handheld video-game players, had a 5.5 percent drop in second-quarter profit and cut its sales forecast for its latest players amid competition from Sony and Microsoft.

Net income was $189 million in the three months ended Sept. 30, compared with $200 million a year earlier, according to calculations made based on Nintendo’s first-half earnings announced Thursday. Sales fell 0.2 percent to $890 million.

Nintendo has seen its market share shrink to about 14 percent for its GameCube console as Sony and Microsoft introduced products with a hard drive, DVD player and Internet connection. Microsoft this week started sales of its Xbox 360 game console, and Sony last December debuted a portable game player to chip away at Nintendo’s dominance in the handheld market.

“Sales of our GameCube player slumped, especially in the U.S. where consumers seem to be waiting for the launch of next-generation consoles, like the Microsoft Xbox 360,” said Yasuhiro Minagawa, a spokesman for Kyoto, Japan-based Nintendo. Nintendo America is based in Redmond.

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The Xbox 360 sold out at several electronics retailers when it was released Nov. 22 in the U.S. Sony will come out with its PlayStation 3 console in the spring, while Nintendo said it will release its “Revolution” console sometime next year.

For the full year ending March 31, Nintendo expects $661 million in profit and $4.4 billion in sales, keeping the forecast unchanged from Oct. 7.

Shares of Nintendo, which have gained 6.1 percent in the past year, fell 0.9 percent in trading on the Osaka Securities Exchange on Thursday. The earnings were announced after the market closed.

Profit in the first half fell 21 percent to $308 million, despite a $203 million currency-related gain on the yen’s decline against the dollar, according to a statement filed to the Tokyo Stock Exchange on Thursday. The yen fell 5.6 percent against the dollar in the period.

Minagawa declined to comment on second-quarter figures, saying the numbers can be misleading to shareholders. The company’s earnings can fluctuate widely depending on the timing of game releases and are too volatile to draw any conclusions from, he said.

Nintendo slashed its full-year sales forecast for the GameCube, which it released in 2001 to compete against Sony’s PlayStation 2 and Microsoft’s Xbox, to 2.4 million units from its July estimate for 2.8 million units. The company expects to sell 30 million game titles for the GameCube, compared with an earlier forecast for 34.5 million.

The company also cut its sales forecast for its latest DS player, which allows users to play games by touching one of the gadget’s two screens, because of slow sales in the U.S. The company expects to sell 12 million units this fiscal year, compared with an earlier forecast of 12.4 million units.

It raised its software sales forecast for DS games 14 percent to 40 million units, led by Nintendogs, a game in which players look after a dog by petting it on the screen and teaching it tricks through voice command. Sales of a brainteaser game for adults also sold well in Japan, the company said.