* Q3 operating profit up 21 pct on Wii, DS demand
* Cuts annual forecast by 15.9 pct due to stronger yen
* Shares end up 1.6 pct ahead of earnings
(Recasts to lead on Q3, adds details, background)
TOKYO, Jan 29 Japan's Nintendo Co Ltd 7974.OS
posted a 21 percent gain in quarterly operating profit on brisk
demand for its Wii video game console and DS handheld game
player, but it cut its forecast due to a stronger yen.
Nintendo booked strong sales for both the Wii and DS in the
year-end holiday shopping season, proving itself relatively
resilient to a global economic slowdown that has slammed rival
But Nintendo's outlook is tempered by a rising yen, which
makes its consoles less competitive and cuts into the value of
overseas earnings. Nintendo gets more than three-quarters of its
sales outside Japan.
The company, locked in a three-way battle with Microsoft
Corp's (MSFT.O) XBox and Sony Corp's (6758.T) PlayStation in the
video game market, lowered its forecast for the year to end-March
to 530 billion yen from a previous 630 billion yen estimate.
The new forecast compares with a market consensus for 604
billion yen in a poll of 18 analysts by Reuters Estimates.
Nintendo had been widely expected to trim its outlook given
that it was based on dollar/yen and euro/yen assumptions of 100
and 140, respectively. The dollar is currently fetching about 89
yen, while the European currency is trading around 118 yen.
October-December group operating profit rose to 249.2
billion from 205.3 billion yen a year earlier and compared with
an average of 247.9 billion yen from four analysts surveyed by
Shares in Nintendo have lost 43 percent over the past 6
months through Wednesday, slightly underperforming the Nikkei
average .N225, which fell 39 percent.
Prior to the announcement, Nintendo's stock closed up 1.6
percent at 32,300 yen. The Nikkei rose 1.8 percent.
(Reporting by Nathan Layne, editing by Ian Geoghegan)