KBC Securities Japan has cut the stock investment rating of videogame colossus Nintendo based on concern that demand for the company’s Wii and DS systems will dwindle over the coming year.

A Bloomberg report says KBC Securities is now rating Nintendo as “hold” rather than “buy,” and has also cut its 12-month price estimate to $580, a 30 percent reduction. According to analyst Hiroshi Kamide, U.S. and European sales are peaking following “amazing growth” this fiscal year, adding, “We believe that it is reasonable to expect a tougher trading environment.”

Driven by a strengthening yen, KBC adjusted its income outlook for Nintendo’s next fiscal year downward by eight percent to ¥391.6 billion ($3.94 billion), shipments of DS consoles by six percent and Wii software sales by five percent. The stronger Japanese currency reduces the value of overseas earnings when repatriated to Japan, the company said, which has a significant impact on Nintendo because most of its sales are made overseas; the new estimates are based on an exchange rate of 100 yen per dollar, rather than the rate of 105 yen per dollar used by previous estimates.

In January, Nintendo increased its sales and profit outlooks for the fiscal year ending March 31 for the third time following the Wii’s ongoing dominance of home videogame console sales. The company’s stock climbed five percent during trading yesterday, but has dropped 22 percent overall this year after doubling in 2006 and 2007.

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