TOKYO (Reuters) - Japanese video game giant Nintendo Co Ltd ushered in a new management team last week as the old guard stepped aside, but its main problem remains -- blistering competition in the game console business.

The effect of that is likely to show up in the company's earnings due out on Thursday, two weeks after dominant Sony Corp triggered an industry-wide price war by cutting the price of its best-selling PlayStation consoles.

Analysts say Nintendo, which makes game consoles and software, could see sales of its "GameCube" console suffer this year as Sony and newcomer U.S. newcomer Microsoft raise the pricing pressure.

Still, they add that Nintendo's software line-up looks promising and should benefit from strong industry-wide console sales, taking up the slack from the GameCube.

The weak yen is expected to give earnings a boost for last business year, but profit growth looks set to slow going forward, especially with the yen showing signs of strength.

The company revised up its 2001/02 earnings forecast last month to a group net profit of 110 billion yen from 80 billion. The weak Japanese currency, which boosted overseas sales and repatriated earnings, added some 50 billion yen to its group current profit.

The Nihon Keizai Shimbun business daily said last month that Nintendo is likely to post 640 billion yen ($5.13 billion) in sales this year, compared with a company estimate of 550 billion yen for 2001/02.

But the newspaper said operating profit may only edge up to 130-140 billion yen for the year to next March from an estimated 120 billion yen last year.

Takashi Oka, chief analyst at Tsubasa Securities, said he expects further price cuts this business year, which could suppress Nintendo's profits.

"I expect Nintendo to slash the GameCube price again at the end of this year," Oka said.

Sony slashed a third from the U.S. price of its PlayStation 2 console and announced cuts in Europe and Japan, triggering a quick response from Microsoft, which knocked around a third off the price of its "Xbox."

Nintendo was forced to follow, announcing it would cut the price of its GameCube machine in Japan to 19,800 yen ($157.90) from 25,000 yen in a bid to regain its price advantage.

Concerns that this will hit Nintendo's bottom line have been hurting its share price. They have dropped more than 22 percent this year, underperforming a 14 percent rise by the benchmark Nikkei average

Nintendo will face the challenge from Sony and Microsoft with a new leadership after announcing on Friday that its charismatic president Hiroshi Yamauchi, 74, would step down after more than half a century at the helm.

Yamauchi, outspoken but publicity-shy and a stand-out with his purple suits and plainspoken style, guided Nintendo's meteoric rise from a tiny maker of card games to a videogame powerhouse.

MARIO AND ZELDA THE SAVIOURS?

Nintendo said it sold a combined 3.8 million GameCubes in Japan and the United States last business year after the machine hit the market in September and November respectively.

Sales in Europe have been going strong since the May 3 debut, Nintendo said. The Nihon Keizai reported Nintendo would aim to ship 12 million GamCubes globally this year.

The hand-held Game Boy Advance, Nintendo's ace product, is expected to shine again, with the newspaper saying shipments would be 19 million units this business year.

Nobumasa Morimoto, analyst at Tokyo-Mitsubishi Securities, said that despite the tough fight against Sony and Microsoft, Nintendo should be able to beef up its profits from software sales as it has built up a loyal following of avid young game players.

"Kids never buy games that are not interesting to them; they are very finicky consumers. Nintendo has sold millions of games under such strict screening," he said.

Nintendo last week announced the newest version of its flagship "Mario" game, due for release in August. The series featuring Mario, the rotund plumber in red overalls, has sold tens of millions of copies worldwide.

The company also plans to roll out more of its popular "Zelda" games later this year, which analysts say should help it to boost sales of the GameCube during the crucial Christmas holiday season.

Shares of Nintendo were trading higher early afternoon on Monday, up 0.23 percent at 17,670 yen, while the Nikkei average was up 0.82 percent.