According to Bloomberg, Nintendo could very well cut its earning forecast and announce that annual profit will decline. The reason? Decreasing Wii sales and the strong Japanese yen.

Net income, Bloomberg reports, will possibly fall 11 percent to US$2.7, marking the first drop since March 2004.

Wii sales have been on the slide with global sales dipping for the first time during the quarter ending June 30. Last month, Wii sales in the U.S. dropped 33 percent — conversely, Sony saw PS3 sales double.

With the strong yen, Morgan Stanley analysts are raising their Nintendo currency-related losses to 37 billion yen from 23 billion yen.

Has the blue ocean started to bleed red?

Nintendo May Forecast First Profit Drop in Six Years (Update2) [Bloomberg]