There are dark clouds of depression looming over Nintendo headquarters after the outfit reported a whopping 52 per cent slide in quarterly profit on Thursday.

The company slashed its full-year earnings forecast thanks to the fact that its Wii console loses its place as the top video game console. The reason is that rivals Sony and Microsoft have been bolstering their catalog of games that appeal to die-hard players and the Wii is losing its novelty value. Another problem is that Nintendo's portable game machine, the DS, is starting to lose ground.

If you believe the Apple friendly press it is mostly due to the iPhone which apparently is replacing the DS in Japan, although it is more likely to be the fact that the Japanese yen has been like a sumo wrestler and eaten the value of overseas profits. Nintendo is hoping that a large-screen version of the DS will save its bacon, something that is about as likely as Linux becoming the number one desktop this year.

Nintendo President Satoru Iwata told a news conference a lack of new, must-have titles had hurt sales of the Wii in the April-September period. In September, Sony's PlayStation 3 usurped the Wii to become the top-selling US videogame console for the first time since its release.