BY the way the actual report
http://www.bloomberg.com/apps/news?pid=20601204&sid=aaRCDANaMfWk&refer=technology

Says
Nintendo's Rating Cut at KBC on Slower-Growth Concern (Update1)

By Mark Lee

March 20 (Bloomberg) -- Nintendo Co., the world's largest maker of portable game players, had its stock investment rating and target price reduced by KBC Securities Japan because of concern demand for the DS and Wii machines will slow.

KBC downgraded Osaka-based Nintendo to ``hold'' from ``buy'' and slashed its 12-month price estimate by 30 percent to 57,500 yen ($580), analyst Hiroshi Kamide wrote in a report yesterday.

Sales in the U.S. and Europe are peaking after ``amazing growth'' this fiscal year, Kamide wrote in the report. ``We believe that it is reasonable to expect a tougher trading environment.''

Nintendo in January increased its forecasts for sales and operating profit for the year ending March 31 for a third time after the Wii outsold rival game players. KBC reduced its outlook for Nintendo's net income next fiscal year by 8 percent to 391.6 billion yen, DS console shipments by 6 percent, and Wii software sales by 5 percent.

The new estimates are based on an exchange rate of 100 yen to the dollar, compared with a previous assumption of 105 yen, the brokerage said. A stronger yen reduces the value of overseas earnings when repatriated by Nintendo, which gets most of its sales from overseas.

A call to the office of Nintendo wasn't picked up today, a Japanese public holiday.

Nintendo climbed 5 percent to 52,100 yen in Osaka trading yesterday. The stock has dropped 22 percent this year after doubling in 2006 and 2007.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

Sarcasm is hard to read, and you're not exactly known for Sony favourable posts, so my fault was probably no completely unfounded...

I think the big sentence is this:

"Nintendo has raised its guidance three times over the past year, most recently in January, for the financial year ending March 31 - but the strengthening yen will cause the value of overseas sales to drop, which could impact the next financial year. "

Here they are talking about the value not the volume of sales, meaning just less money per Wii, what is basicly right. Wii's are produced in China. This production is payed mostly in $ or the chinese currency, which is basicly the same. So yes they get less per Wii, but have to sell less per Wii. Basicly the profit margin stays the same, but the volume shrinks ;) Less volume on same margin means less profit. Less profit means lower stock price. I don't think they are right, because they will sell more Wii's next fiscal than this, what should offset such volume loss easily :)

I'm rather surprised that an economic analyst would make such a fallacy of observation. During economic hard times, you tend to see a rise in spending on entertainment, not a drop. Indeed, the more affordable the entertainment means is to the average consumer, the more of an increase in sales you tend to see for that product. Which means, of course, that if the Wii does get a price drop before this recession is over, sales of the system will benefit immensely from said recession.