As predicted by analysts late last year, Nintendo is forecasting a drop in annual profits for the first time since the Nintendo DS's 2004 introduction. It's not a loss, just a reduction in profits -- Nintendo is still forecasting profits of ¥230 billion ($2.43 billion), compared to fiscal 2009's ¥279.1 billion ($2.95 billion). The AP's Yuri Kageyama notes that the Wii price drop, as well as slower sales early in the fiscal year (reflected in the first half earnings report), negatively impacted Nintendo's profits.

Analyst Yuta Sakurai thinks Nintendo is being too pessimistic (or just not optimistic enough, considering that the subject is enormous profit). "We are expecting the results to be better than the company forecasts for the Wii," the Nomura Securities analyst said. "Christmas shopping was strong." Nintendo did have an extraordinary December, with both the Wii and the DS breaking three million units each just in the US. It then went on to break sales records in the first two months of 2010. Perhaps Sakurai is correct, and Nintendo is just being modest about its profits. We'll find out on Thursday when Nintendo releases its annual earnings.

[Via 1UP]

This article was originally published on Joystiq.

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