Nintendo, the electronics manufacturer, said that its annual profit rose by 48 per cent on the back of strong sales of its Wii console, but forecast lower than expected annual growth of 9 per cent, adding that sales of its handheld DS device had slowed.

Analysts described the growth forecasts as disappointing, even though the release of a hugely popular fighting game, Super Smash Bros. Brawl, and the launch of a 'fitness-focused' Wii in Europe tomorrow are expected to drive sales of the Wii.

Nintendo said that for the full year, net income rose to 257 billion yen (£1.25 billion), beating a consensus of analyst estimates compiled by Reuters. Revenues rose by 73 per cent to Y1.7 trillion.

But the company, which is valued at $82 billion (£41.6 billion), said that net income would rise by a more most modest 26.3 per cent to Y325 billion in the current year, and that operating income would climb to only Y530 billion — 6 per cent below the average analyst estimate of Y566.5 billion.

Annual sales of the handheld DS console were also expected to fall by 8 per cent, from 28 million units from 30.3 million, Nintendo said.

Nintendo shares closed down 1.4 per cent today ahead of the results being released. The Nikkei was down 0.3 per cent.

The Wii console, which has been credited with introducing new audiences to video games, has consistently outsold its competitors — Sony's PlayStation 3 and Microsoft's XBox 360 — since its release in November 2006, even though it is aimed at a different market.

Nintendo said that in the current year, global sales of the Wii would rise by 34 per cent to 25 million units, and that sales of game software would rise by 48 per cent to 177 million units.

Revenue would increase by 8 per cent to Y1.8 trillion, the company said, even though it had factored in foreign-exchange losses of Y12 billion because of the expected appreciation of the yen against the euro.

In total, 24.5 million Wiis had been sold since the device went on sale 18 months ago.

Growth would continue in the year to March 2009, but at a more modest rate, Nintendo said.

Revenues would rise to Y1.8 trillion. There would also be an 8.8 per cent rise in operating profit, to Y530 billion.

The company said: "Nintendo's strategy is to accelerate current sales momentum, from 'must-have for every family' to 'must have for everyone' by continuously introducing new software and services which take advantage of its expanded installed base."

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