Nintendo profits have been smashed with the #1 games console maker reporting a whopping 52 percent slide in quarterly profit.

The Company who did not pass on price cuts in Australia despite cuts in the USA, has been hurt by slowing demand for its flagship Wii videogame console. Analysts are also tipping that the Company could suffer further as demand for the new Sony Slim PS3 cuts further into Nintendo sales.

In recent months demand for Nintendo products has slowed significantly with Apple and their  iPhone cutting into Nintendo’s dominence of the DSi handheld games market.

Nintendo, is also facing  stiff competition in the videogame market from Microsoft who posted an operating profit of $709 million in the July-September quarter, compared with 133 billion yen a year earlier according to Reuters.

Nintendo has also cut its operating profit forecast for the year to March 2010 by a quarter to 370 billion yen, ending a three-year run during which it booked a record profit on booming demand for its Wii console and DS portable device.

Acccording to the Financial Times the weaker results from Nintendo should give hope to rivals Sony and Microsoft that their PS3 and Xbox 360 machines could still catch up with the Wii. It could also fuel growing speculation in the industry that Nintendo plans to launch a new version of the Wii next year.

The low-cost and innovative motion-sensing Wii controller made it a runaway success on its launch in 2006. Sales, however, have slowed this year. After Microsoft and Sony cut the US prices of their main console models to $299 this summer, Nintendo responded by cutting the Wii’s price to $199 in September.

Nintendo said it was now aiming the Wii at the upcoming holiday season, “with the hardware price reduced and a strong software line-up”. But the group said that first-half sales of the console were down by 43 per cent on last year to 5.75m.