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GameCube blasts Nintendo forecast

Nintendo's GameCube is competing against Sony's PlayStation 2 and Microsoft's Xbox in the $20 billion video games market
Nintendo's GameCube is competing against Sony's PlayStation 2 and Microsoft's Xbox in the $20 billion video games market

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TOKYO, Japan (Reuters) -- Videogame company Nintendo Co Ltd on Monday slashed its group net profit forecast for the business year that ended on March 31 by 18 percent due to sluggish sales of its GameCube machine.

The Kyoto-based company, known for its hit "Pokemon'' games, now expects a group net profit for 2002/03 of 66 billion yen ($548.5 million) against its November forecast of 80 billion yen.

Citing poor demand for its mainstay GameCube console at home and abroad, the company trimmed its group sales estimates to 500 billion yen from 600 billion yen.

"Demand for the GameCube console was significantly lower than our expectation,'' a company spokesman said, putting console sales for the full year at 5.6 million units, far below its target of 10 million units.

Nintendo's GameCube has faced fierce competition from Sony Corp's PlayStation 2 and Microsoft Corp's Xbox, especially in the United States, the world's largest videogame market.

The latest earnings forecasts compare with a net profit of 106.44 billion yen on sales of 554.89 billion yen a year earlier.

A senior company official told reporters in Osaka, western Japan, that the company would stick to its forecast of a 140 yen annual dividend.

Analysts had expected the game maker to miss its profit target, due in large part to slack demand for the GameCube console and software at home and abroad, but the figure given on Monday was below their expectations.

In January, Nintendo President Satoru Iwata told Reuters that sales of its GameCube home consoles in 2002/03 were likely to fall more than 10 percent short of its target of 10 million units.

Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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