Not even the mighty Nintendo can escape the wide grasp of the global recession. Today the company announced that its net income fell 46 percent to 67.7 billion yen in the third quarter ended December 31. Sales meanwhile increased 13 percent to 699.5 billion yen, and operating profit rose 21 percent to 249.2 billion yen.

"Wii sales in Japan during the year-end shopping season didn't meet our forecast," President Satoru Iwata said at a briefing in Osaka, according to Bloomberg. "Still, I don't think demand for the Wii has run out."

Nintendo did lower its Wii hardware sales forecast for the fiscal year ending in March by one million units to 26.5 million. The DS, on the other hand, saw its sales forecast bumped up by one million to 31.5 million units. (So analyst Michael Pachter was half right.)

More importantly, Nintendo slashed its annual profit forecast, and the company is expecting its first drop in net income in five years. Nintendo cited the "unprecedented strength of the yen against major foreign currencies" as a major factor in this. In fact, the yen grew 30 percent against the euro and 24 percent against the dollar in 2008, thereby reducing the value of Nintendo's foreign- currency cash and deposits. Net income for the year is now expected to come in at 230 billion yen ($2.6 billion), which would be 33 percent less than Nintendo forecast in October. Operating profit was also lowered by 16 percent to 530 billion yen, and sales for the year are predicted to rise 8.8 percent to 1.82 trillion yen, which once again is less than the earlier forecast of 2 trillion yen.

Nintendo noted that life-to-date sales of DS hardware have reached 96.22 million worldwide with software sales of 533 million. The Wii has seen global shipments of 45 million worldwide with 312 million games. Nintendo pointed out that Wii Fit reached shipments of 14 million and Mario Kart Wii reached 13.67 million.