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Once again, Nintendo released a quarterly earnings report that not only solidifies the company as a major player going into the next generation, but shows that it's certainly onto something with both the Wii and the DS. But according to that same report, not everything is perfect with the company's handheld system.

According to Nintendo, it's only forecasting 9 percent growth going forward as sales of the DS continue to slide and expectations of higher sales continue to dwindle. Nintendo contends that DS sales could fall to 28 million units from 30.3 million units sold.

Mario is coming in a big way to the DS.

(Credit: Nintendo)

And while some market analysts are disappointed with the news of the DS slowing and the company itself not growing as fast as they would like, they fail to fully understand the nature of the beast they're trying to gauge.

If analysts were worried about the Wii, I would probably agree. But why would anyone be worried about Nintendo's plans for the DS? Will it sell fewer units this year? Maybe. But if nothing else, I think that we'll soon find that Nintendo has something up its sleeve that will jump-start sales and send those same, misguided analysts into a frenzy.

LeapFrog's upcoming Didj gaming system.

(Credit: LeapFrog)

I stopped by a LeapFrog event today to at the New Museum of Contemporary Art in New York. I was pleasantly surprised when the company representatives trotted out a new handheld learning/gaming system, the Didj ($89.99), which is due to arrive this summer. LeapFrog doesn't exactly bill the Didj as a Nintendo DS competitor, but the the new device is geared toward 6- to 10-year-olds, an age bracket where the DS currently rules.

LeapFrog also had its upcoming Leapster 2 ($69.99) at the event, which is targeted at even younger children. The idea behind the Didj is to up the gaming and graphics ante while continuing to integrate the learning stuff that the company's known for. Those educational elements are starting to show up in a handful of DS games, but LeapFrog's giving the whole educational-gaming slant a harder spin to appeal to parents who would prefer to have their grade-schoolers graduate to something other than the DS.

While the Didj doesn't have a Wi-Fi connection like the DS, there's a whole online angle that LeapFrog's working with its LeapFrog Connect Application. The application lets children customize game content (the device connects via USB to both PCs and Macs).

According to LeapFrog's news release, "Players first select and personalize an avatar. Then they design the game, choosing background scenery, color schemes or music. Most important, parents and kids can then customize content, connecting gameplay with schoolwork. Multiplication hard to master? Kids can choose to be quizzed on the 6s, 7s and 8s tables. Spelling a stumbling block? Kids can create a custom spelling list from the 10,000-word database and practice for next week's test."

The Leapster 2 will be available this July as well.

(Credit: LeapFrog)

I saw an early build of the game that ships with Didj and the graphics are indeed--excuse the pun--a nice leap forward for LeapFrog. The system is scheduled to be released in July with an MSRP of $90 and a total of 10 games will be available during the first year, including Star Wars and Indiana Jones branded titles.

Here's a rundown of the Didj's key specs:

• Processor: 393 MHz Arm 9
• Display: 320x240 resolution
• One 24-bit 2D layer (no hardware acceleration)
• One 16-bit 3D layer
• One YUV video layer (no hardware acceleration)
• Graphics: API OpenGL ES 1.1--A reduced instruction set version of OpenGL for embedded systems
• Main RAM: 32 MB DDRI 131 MHz
• NAND Flash: 256MB for data storage/download content
• Media Cartridge: 64MB
• System Software: Brio--Firmware is built on an abstraction layer called Brio to make OS and hardware transparent to developers. This means all software must be ported to Brio to run on this device.
• Screen LCD: 3.2 inches, 16.7-Million Color TFT

Feast your eyes on the winner

(Credit: CNET Networks)

An analyst at Pacific Coast Securities made waves today when he claimed that the next iteration of the Nintendo DS is complete. According to the analyst, the new DS "is thinner (it has no GBA port), has onboard storage, and larger screens."

He went on to claim that Nintendo has no plan of releasing the new version "until sales begin to tail off in all three major geographies."

Wow. So does that mean we will never see another Nintendo DS? Because as far as I can tell, there is no sign of tapering sales and people are running to stores just to have different colors.

Regardless of whether you're a PlayStation zealot or even a Sega fanboy who can't find it in yourself to buy a Nintendo product, you must admit that Nintendo has been incredibly successful with its DS. And if you ask me, sales will continue to be strong and each update will compound growth until one thing finally happens--the Nintendo DS will become the most successful gaming device of all time.

In years past, E3--the Electronic Entertainment Expo--involved as many as 50,000 members of the video game industry descending on the Los Angeles Convention Center in early May. This year, the show--now dubbed the "E3 Media & Business Summit"--has been radically downsized, rescheduled to July, and moved out to Santa Monica.

With all of the gaming consoles now effectively old news, the show doesn't quite have the air of anticipation as it did the last few years, when gamers were scrambling to get a glimpse of the then-unreleased Xbox 360, PlayStation 3, and Nintendo Wii. Still, the show promises to hold a surprise or two, and the keynote press conferences from the Big Three are always where the biggest news hits. Microsoft kicks things off tonight at 11:30 p.m. ET/8:30 p.m. PT. Tomorrow, it's Nintendo (Wednesday, July 11, noon ET/9 a.m. PT), followed immediately by Sony (2:30 p.m. ET/11:30 a.m. PT).

We'll have complete coverage of each event, as well as all of the news from third-party developers later in the week. In the meantime, here's a roundup of the preshow action:

• Revving up for a pared-down E3


• PSP redesign: Fact or fiction?


• What's on deck for the PS3?


• Microsoft E3 preview: Price drop anyone?


• The DS at E3: Games, games, and more games


• What E3 might bring to the Wii


• PlayStation 3 price cut official: 60GB PS3 now just $500


• Microsoft to 'Bring it Home' again at E3 '07


• EA gets strangely political with 'Army of Two' E3 mailings


• Garden sim 'Plant Tycoon' extends its roots


• Details emerge on Spielberg's EA video game initiative


• See all E3-related stories (Crave)


• See all E3-related stories (CNET News.com)

Mario & Sonic at the Olympic Games. You probably could have figured that out yourself.

Sega and Nintendo working together still vaguely weirds me out. I grew up when children became bitter enemies or best friends depending on whether they thought the Super Nintendo or Sega Genesis was the better system. To this day, Sonic the Hedgehog and Mario working together just feels wrong, somehow.

That's not stopping Sega, chummier than ever with Nintendo, from showing off its upcoming Wii and DS titles at E3. We've heard about these games before, but E3 will bring more screenshots, more trailers, hands-on impressions, and harder release dates for all of these games.

First on deck is Mario & Sonic at the Olympic Games for the Wii and DS. This will be the first video game ever to feature both Mario and Sonic together. The mascots will be bringing their entire crews along for the titles' various racing, swimming, and jumping minigames, so you'll be able to go for the gold with Yoshi, Tales, Luigi, and even Knuckles. The real Olympics won't be held until next year, but this Olympic clash of the gaming titans is headed for this year's holiday season.

Nights: Journey of Dreams

Also highly anticipated is the upcoming Wii title Nights: Journey of Dreams. This quirky, colorful game is the sequel to the cult Sega Saturn title Nights into Dreams, and has plenty of Sega fans waiting with bated breath. Even if you don't remember the original Nights, this new game's trippy aesthetics and unique gameplay make it worth a look when it comes out in the fall.

For more classic gameplay, Sega will be showing off Sonic Rush Adventure, the sequel to 2005's excellent Sonic Rush. Like its predecessor, Sonic Rush Adventure is a mostly 2D platform game in the vein of the original Sonic the Hedgehog, though 3D boss and water battles will offer an interesting twist when it ships this fall.

Two new games based on the anime series Bleach are heading to Nintendo's consoles as well. Bleach: Shattered Blade for the Wii and Bleach: The Blade of Fate for the DS offer tournament fighting action with giant swords. Bleach: Shattered Blade looks like the most interesting game of the pair, with dozens of selectable characters and Wiimote-based sword-swinging action. Both games will hit stores this fall.

Finally, light-gun fans will be be able to check out Ghost Squad, the Wii port of the 2005 arcade game. The antiterrorism shooter will use the Wiimote like a light gun, and hopefully bring the arcade game's fast-paced action to the Wii. It'll ship this holiday season.

At least 80 employees in Sony Computer Entertainment of America's Foster City, California PlayStation unit have been laid off, according to a report in the popular video game blog, Kotaku.

But Kotaku quoted SCEA spokesman Dave Karraker as saying, "In an effort to accurately align the company to meet the changing needs of our consumers and our industry, (SCEA) has found it necessary to...restructure the company as necessary to continue our standing as the market leader."

And in an email to CNET News.com, Karraker confirmed the report Wednesday morning.

Given Sony's troubles--the much-hyped PlayStation 3 is currently in last place among next-generation video game consoles, trailing Nintendo's Wii and Microsoft's Xbox 360--Karraker's comment about SCEA trying to maintain its position as "market leader" is being laughed at by some. Still, the company's PlayStation and PlayStation 2 were world-beaters, and the PS2 is still a best-seller.

Kotaku reported that Karraker would not comment on the number of employees affected, which the blog put at "roughly 80 to 100," according to a source who was among those laid off.

Those who lost their jobs were asked to leave immediately and "either have their manager pack up their desk for them or schedule an appointment some evening to fetch their possessions," Kotaku wrote.

Nintendo Wi-Fi Connection has reached 5 million DS users

(Credit: Nintendo)

Nintendo said Wednesday that its Wi-Fi Connection service--which allows Nintendo DS users to play wirelessly against each other--has surpassed 5 million users.

All told, the video game giant said, users have initiated more than 200 million sessions, playing games like Animal Crossing: Wild World, Mario Kart DS, Metroid Prime Hunters and others wirelessly.

And despite the attention paid to next-generation video game systems like the Nintendo Wii, Sony PlayStation 3 and Microsoft Xbox 360, the DS is currently the best-selling system of all, having moved 470,000 units in April, according to NPD Group.

Electronic Arts on Wednesday announced that it will release this fall a new Simpsons video game.

The announcement, by the world's-largest video game publisher, came just minutes before an invite-only press event in San Francisco where it was expected to make a "special announcement." It's not yet clear if the two announcements are one and the same.

(Credit: Twentieth Century Fox)

The game, which is expected to be released this fall in conjunction with Gracie Films and Twentieth Century Fox, will feature the familiar Simpsons characters, and presumably, the storyline. It will also feature the voice actors from the TV series.

"In The Simpsons Game, Homer, Marge, Bart and Lisa use exciting, all-new powers to save the world from rising chaos," EA wrote in a press release about the new game. "To help the Simpsons, gamers at home must journey through all of Springfield (as well as vast worlds beyond), vanquish an amazing array of villains, and fight their way through parodies of multiple popular games."

The game is slated to be released for the PlayStation 3, PlayStation 2, PlayStation Portable, Xbox 360, Nintendo DS and Nintendo Wii.

Nintendo said Friday that it would address shortages of its hit Wii video game console by ramping up production.

According to the Associated Press, the video game giant's president, Satoru Iwata acknowledged that "we have not been able to properly foresee demand."

The company said it would boost sales of the Wii--which has dominated the next-generation console battle against Microsoft's Xbox 360 and Sony's PlayStation 3 since it was released in November--so that deliveries would increase by next month.

The news came a day after Nintendo released fiscal 2007 results showing that revenue had jumped 89.8 percent and profit 77 percent on the strength of the success of the Wii and also because of impressive sales of the Nintendo DS handheld device.