Satoru Iwata, the president of Nintendo Co., is a self-proclaimed Apple Inc. (AAPL) fan. He carries an iPhone and uses a Mac laptop. So when Mr. Iwata says Nintendo and Apple aren’t competitors, he should know what he’s talking about.

Nintendo, whose gadgets and software dominate the portable-videogame market, faces the greatest risk from the emergence of Apple’s iPhone and iPod Touch as gaming platforms. But Mr. Iwata says attempts to create a rivalry between the two companies make him “uncomfortable,” because he says it isn’t true. He argues the companies appeal to different consumers.

Yet Apple has made clear that it intends to go after Nintendo’s turf.

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At its media event in early September, Apple (AAPL) threw down the gauntlet to Nintendo Co. and Sony Corp. (SNE). Dedicated gaming gadgets like the Nintendo DS and PlayStation Portable “seemed so cool,” said Phil Schiller, Apple’s head of marketing, but “they don’t stack up against the iPod touch.” Now an industry research firm has come out with numbers that back up Apple’s challenge.

A study by DFC Intelligence, released on Friday, predicts that games for the iPhone and iPod touch (an iPhone without the cellular capabilities) will be the principal drivers for growth in the overall portable and mobile gaming market in five years.

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When Nintendo’s top brass gathered in Tokyo to speak to analysts Friday, they admitted they had been caught off-guard by the slowdown in Wii demand.

To the dismay of analysts and fans, they did not announce a new Wii console, as some had hoped, or a revolutionary new game.

But they dropped a few hints about where they might be heading.

Nintendo’s legendary game designer, Shigeru Miyamoto, who helped to create Super Mario Bros., Zelda and a host of other hit games, said a new Zelda game for the Wii will take advantage of the console’s Wii Motion Plus controllers to allow for better swordplay. It is being targeted for a 2010 release.

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Videogame publishers, pushing to expand their businesses, are making games that target girls and women a new industry battleground.

This holiday season, more games than ever are being geared toward female players. Electronic Arts Inc. (ERTS) is releasing the latest installment of its “Littlest Pet Shop” game for young girls and introducing a series of fashion-themed games called “Charm Girls Club” for older girls later this month. Sony Corp. (SNE) in August packaged a lilac version of its PlayStation Portable device with a “Hannah Montana” game, based on the popular television show about a girl and her secret pop career.

Publishers also will target women with workout games. Ubisoft Entertainment SA is introducing “Your Shape,” a personal-training game, and “Just Dance,” a dancing game, in November. Nintendo Co. hit the market with “Wii Fit Plus,” a sequel to its popular fitness game, in September.

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Nintendo’s Wii has outsold rival game consoles. Now a new study says it also outlasts them.

The study by SquareTrade, an independent provider of warranties on electronics, estimates that 2.7 percent of Wiis fail during the first two years of ownership, compared with a 10 percent failure rate over that period for Sony’s (SNE) PlayStation 3 and a 23.7 percent failure rate for Microsoft’s (MSFT) Xbox 360. The Wii failure rate is not just low for a game console, but for any kind of consumer electronics, the SquareTrade study says.

The company said it came up with the results after studying failure reports for 16,000 game consoles purchased by SquareTrade customers.

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U.S. sales of video game hardware, software and accessories were down 23 percent in May to $863.3 million, according to market research firm NPD. It was the first month with sales under $1 billion since August 2007.

Hardware sales were hit the worse, down 30 percent. Software sales were off 17 percent, while accessories were down 25 percent. For the year to date, sales overall are down 7 percent, with hardware off 6 percent, software 8 percent and accessories 5 percent.

Among the consoles, the Nintendo Wii sold 289,500 units, down from 340,000 in April and 601,000 in March. That was followed by the Microsoft (MSFT) Xbox 360 at 175,000, flat with April.

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Satoru Iwata is not your typical Japanese company president. When he talks about the games his company produces, the 49-year-old Nintendo CEO’s eyes positively twinkle with mischief and excitement.

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Let’s just admit it: the Nintendo people are total geniuses. I was one of the first journalists to see the Wii, in Kyoto in the spring of 2006.

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Every year, the annual E3 videogame expo kicks off with media briefings by the three console makers: Microsoft (MSFT), Nintendo and Sony (SNE). The trio vie to get the most buzz for their games and products by trying to one-up each other with the most entertaining, star-studded show they can muster up.

Microsoft, who kicked off E3 Monday morning, set a high bar this year with a media briefing that was preceded by a mysterious email the day before. That email stated that the event would start five minutes early “due to a very special addition.”

Its special surprise guests turned out to be the Beatles’ Paul McCartney and Ringo Starr, as well as the spouses of the late John Lennon and George Harrison, Yoko Ono and Olivia Harrison. All showed up to promote the much anticipated “The Beatles Rockband” music simulation game by MTV Games, in which users can pretend to be members of famed music group.

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Netbooks are hot. Intel (INTC) estimates that the laptops–which can cost less than $300–sold faster in their first 12 months on the market than Apple’s (AAPL) iPhone or Nintendo’s Wii game console did. Could a similar low-end niche emerge in server systems?

It’s too early to tell, but there are some tantalizing signs–and some big ramifications if the trend takes hold.

First, some background: Hardware companies have long tried to convince customers to buy new machines that do computing work faster. Many customers in recent years have moved an increasing percentage of jobs away from “big iron”–mainframes and other servers that use proprietary circuitry–in favor of inexpensive servers based on the same x86 chip design used in PCs.

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Here’s a puzzle: Why does Nintendo expect dramatically fewer software titles to sell for its Wii and DS game machines this year?

This morning, Tokyo time, the company announced results for its fiscal year ended in March that were a little bit better than expected thanks to the strength of the Japanese Yen, turning in 1.8 trillion Yen in revenue ($18 billion, roughly) and 555 billion in operating profit. But for the current year, the company forecast sales to be flat, at 1.8 trillion, which is in line with estimates, but profit of 490 billion Yen, which is short of Street estimates for about 517 billion.

Nintendo says that’s because it will see a sharp decline in software titles for the DS, and software, of course, carries higher profit margins.

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While much of the tech sector has fallen on hard times during the recession, the videogame industry has thrived, as penny-pinching consumers look for lower-cost entertainment. Why go out when a family of four can buy a videogame and get 50 hours of entertainment out of it?

And so the industry gathered in San Francisco for the annual Game Developers Conference to rally its troops. While the PC industry is expecting its second consecutive year of negative unit sales growth, much of the talk at the conference was of 5 to 10 percent annual industry growth, and of the prospects for another record-setter in 2010.

Nintendo was particularly buoyant at the show, where it introduced an Internet-enabled version of its portable DS player that will sell for $169, and announced its 50 millionth Wii shipment.

How’s this for confidence? Nintendo Of America President Reggie Fils-Aimé in an interview ruled out any potential for Nintendo to lower the price of its motion-controlled Wii game console this year. “Why would we?” he said.

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Has Nintendo run out of new levels to play?

Deutsche Bank analyst Satoru Kikuchi this morning launched coverage of the videogame company with a Sell rating, asserting that profits are likely to “peak and decline after growing on the success of the Wii and the DS.” He asserts that earnings could “return to past levels if the company fails to come up with new blockbuster platforms.”

Kikuchi expects Nintendo’s profits in the March 2009 fiscal year to “slightly” excess guidance, but then sees profits sliding 18 percent in FY 2010, due at least in part to unfavorable exchange rates, with another 19 percent fall in FY 2011 “as sales slow.”

In Kikuchi’’s view, a key question going forward is well much Nintendo can boost sales for long-selling titles for the Wii and the DS. He notes that sales in Japan have “declined substantially” for both Wii and DS hardware and software.

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After a decade of experimentation, companies have yet to find a reliable way to burnish their brands online. Research shows barely more than one in 1,000 people click on banner ads. What’s more, they rarely hang around long enough to absorb a brand message.

Former Madison Avenue hotshot Matt Freeman aims to change all that. Freeman’s company, Betawave, is developing ways to boost visitor “engagement” and plans to charge advertisers not just by each click or view but also by people’s attentiveness. The concept is untested, but it has generated excitement. Several venture capital shops in December put $22.5 million into Betawave. “Matt’s ahead of the curve,” says Sean Finnegan, chief digital officer at Starcom MediaVest, which buys ads for Coca-Cola (KO), Procter & Gamble (PG), Nintendo, and others.

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Updated: The technology sector, already rocked by the credit crunch and slowing global economies, is facing a bleak 2009, the impact of which is going to be felt across the entire ecosystem. From PC makers to chipmakers to chip equipment makers, almost everyone is bracing for a stomach-churning ride.

“The problem is three times worse than everybody thinks,” said Terry Gou, chairman of Hon Hai Precision Industry Co., a large Taiwan-based contract manufacturer. According to The Wall Street Journal, he is looking to cut jobs in his factories, most of them in mainland China.

Now here is a man who should know the actual extent of the troubles. His company’s customers include Apple (AAPL), Nintendo and Hewlett-Packard (HPQ).

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