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Nintendo looks to restore magic with 3D console

Nintendo on Friday brushed off suggestions its magic may be fading despite declining sales of its Wii console, as it prepares to unveil a handheld 3D device it hopes will drive a new gaming revolution.

President Satoru Iwata remained tightlipped about the much-awaited gadget, tentatively know as the "3DS", only saying it will offer a whole new gaming experience to players.

He also shrugged off suggestions that Nintendo has passed the peak of its growth after the company announced its first decline in annual profit for the first time in six years Thursday on slowing sales of its Wii and DS devices.

The maker of the hit series "Super Mario Bros" saw net profit fall 18 percent in the year to March as it cut prices of the Wii in response to competition from Sony and Microsoft in the multi-billion dollar industry.

Boasting total lifetime sales of 70.93 million units, a record in the firm's history, the Wii has easily outsold Sony's PlayStation 3 and Microsoft's Xbox 360 since its 2006 launch.

However, analysts say that as the impact of the Wii fades within a saturated market, Nintendo's next move will determine whether it still has the ability to lead the industry.

"We believe there is more room for us to expand the game playing population. We have to do our best, as an entertainment business, so that we can keep offering good surprises to consumers," Iwata told a news conference.

"Obviously, a game won't be fun only because you made it 3D," he said.

"This is still an uncharted territory that requires us to experience more trials and errors."

The so-called Nintendo 3DS will go on sale this fiscal year, allowing users to see 3D images without the need for special glasses. It will be showcased at the E3 game trade show in June in Los Angeles before its commercial launch.

Iwata's remarks came a day after the Kyoto-based company predicted net profit for this year to March 2011 would fall 12.5 percent.

Nintendo said it expects global sales of Wii consoles to fall to 18 million in the fiscal year, down from 20.5 million in fiscal 2009 and 26 million in fiscal 2008.

"I think 18 million consoles is a fairly ambitious target, considering it has been four years since this device was originally launched," Iwata argued.

"I am not pessimistic about the future. We only realise that selling more in the current business environment will be difficult," he said.

Iwata also said the new console will come with tighter piracy controls, which he said is a growing problem in Asia and Europe.

"What is worrying is that more and more people who wouldn't have engaged in these acts before are now doing it without hesitation," he said. "What worries us is that people finding no value in paying for software," he added.