Nintendo Co Ltd is set to roll out a new Wii in 2012 hoping to arrest its drop in profits after losing ground on Microsoft and Sony. The launching is set for June 7 during the E3 game show.

For the second straight year, Nintendo reported a drop in its annual profits after demand for the Wii has slowed down as Japanese consumers cut down on their expenses. Since its launch in 2006, 86 million units of the Wii have been sold. Last year, the number of consoles dropped to 15.1 million from 20.1 million in 2009. It is predicted to drop to another 2 million this year.

Bent on gaining some ground on Nintendo, Microsoft and Sony have introduced new products to the market. To meet the challenge of its rivals head on, Nintendo rolled out a glasses-free 3D-capable handheld game the 3DS this year.

The company’s sale of non-3D handheld Ds likewise decreased by nearly 10 million units to 17.5 million and Nintendo is expected to decrease 11 million for this term. According to the Thomson Reuters Smart Estimate, Nintendo’s operating expenses dropped to 52 percent from 171.1 billion yen last month from 356.8 billion yen in 2010.

According to eight analysts from Thomson Reuters IBES, after the March 11 earthquake and tsunami in Japan, Nintendo’s operating profits will drop to 175 billion yens after the March until March 2012 compared to 215.8 billion yens last time around.

However, Nintendo expects its sales to gradually improve by next year, with the sales of the 3DS, the company’s 3D handheld console, offsetting an expected decrease in Japanese consumer spending after the March 11 earthquake and tsunami. In a statement, it said that it has not experienced direct damage that will have a significant effect on their production. However, the company expects an indirect impact from individual consumption patterns.

It expects sales to increase by 8.4 percent to 1.1 trillion yens for the current fiscal year until March 2012. Profits will also increase 41.7 percent to 110 billion yens.

Although no details had yet been released, the new Wii console is expected to be more powerful or comparable to the Xbox 360 or the Sony PlayStation 3. Industry insiders said the new console is capable of 1080p resolutions. The joypad will come with a six-inch touch screen display providing high definition or nearly HD graphics.

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