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TOKYO – Japanese game-maker Nintendo suffered its first drop in annual profit in six years, hit by a price cut for the Wii home console and sliding global sales.

The maker of Super Mario and Pokemon games said Thursday that net profit for the fiscal year ended March 31 fell 18 percent to 228.6 billion yen ($2.5 billion).

Kyoto-based Nintendo Co., which does not break down quarterly numbers, said annual sales slipped 22 percent to 1.434 trillion yen ($15.4 billion).

Nintendo is expecting tough times to continue. It forecasts sales to fall 2.4 percent to 1.4 trillion yen ($15 billion) for the fiscal year through March 2011 and expects earnings to slide 12.5 percent to 200 billion yen ($2.2 billion).

But the company expressed confidence in the popularity of its game machines. It is banking on a handheld that allows for 3-D games without the need for special glasses and which is set to go on sale this fiscal year.

Nintendo is facing intense competition from Microsoft Corp. with its Xbox 360 and Japanese rival Sony Corp., which makes the PlayStation 3. Both are also bringing 3-D gaming to their home consoles although those games require special glasses.

Nintendo's handheld may also face a challenge from smartphones like the iPhone, which are increasingly popular and offer games and other entertainment content.

Company officials have repeatedly shrugged off such concerns, including new fears about the threat from the iPad, saying that they know the game business, and appeal to a wide range of players, including the elderly, and both men and women.

Wondering why AT&T's 3G data pricing for the iPad seems ... well, kinda reasonable? One analyst thinks he has the answer: a "quid pro quo," with AT&T getting a six-month extension on its exclusivity deal for the iPad in exchange for giving iPad users a break on its usual 3G data rates.

That's the speculation of BroadPoint AmTech analyst Brian Marshall, who tells Computerworld that he thinks AT&T's iPad 3G data offering — $30 a month for truly unlimited 3G data, or $15 a month for 250MB, all without a contract — gave the carrier enough leverage to "negotiate a six-month extension on the iPhone exclusive."

After all, Marshall notes, AT&T usually charges $60 a month for unlimited 3G on its laptop cards, or $35 for 200MB of monthly data. It even sweetened its iPad 3G deals by offering them month to month, without a contract.

Another clue was the fact that AT&T got the 3G data deal for the iPad in the first place, a development that "floored" Marshall, according to Computerworld. He — like many others, myself included — had been led to believe that an Apple-Verizon partnership on the iPad was a "certainty," Computerworld says.

So if all that is true — a big "if," considering that neither Apple nor AT&T has divulged details on their iPhone exclusivity contract — when might we see an iPhone for Verizon, or any other carrier besides AT&T? Probably not until the first quarter of next year, Marshall says in the Computerworld story.

Unfortunately, I'm in agreement with Marshall. I, too, was blown away when Steve Jobs announced that AT&T — and only AT&T — would be providing the iPad 3G data plans, especially considering all the rumors that Jobs might unveil an iPhone for Verizon on the very day he announced the iPad back in January. I started getting the sinking feeling that no new carrier would get the iPhone in 2010.

But hey, you never know, right? Maybe now that Gizmodo has (apparently) spoiled the big next-gen iPhone reveal, Jobs will see fit to spring a Verizon iPhone on us as his "One more thing ... " next month. Seems like a long shot, though.

As a tech blogger, I can count on a few things. Every day there will be something to say about Apple. And with almost as much regularity, Facebook will screw up something related to user security and privacy.

This week the popular social network has found itself besieged by these issues — one an intentional change to the way Facebook works, the other a major security bug.

The first involves a new way for applications to be added to your Facebook profile. Facebook has made it possible for some sites to hook into your profile if you use one of those ubiquitous Facebook sharing buttons on a third-party site. By simply clicking a “share this” button somewhere on the Web, you can suddenly find one of these sites (like the Washington Post or CNET) added to your profile without your approval or even knowledge.

The addition is automatic and there’s no easy opt-out mechanism.

MacWorld offers a convoluted system to get rid of these self-adding sites, but it’s not a walk in the park and it’s not permanent. Click a “Share” button again and the app will just come back. Per its story on the matter:

“To see a list of your current Facebook applications, click Account in the top right corner of Facebook, then select Application Settings from the drop-down menu. If you click on the Edit Settings link for one of the new applications, you'll always see one tab called Additional Permissions that has a box that's unchecked by default. Checking it will give that application permission to 'Publish recent activity (one line stories) to [your] wall.' Sometimes there is a second tab with an option to add a bookmark for that link to your wall. And a few apps also have a Profile tab where you can add a box to your profile for that site and pick a privacy level for it.”

For now, anyway, it looks like this “enhancement” is here to stay. There's really nothing to prevent this feature from remaining: Facebook isn't subject to any special law outside of what it pledges in its terms of service, and those terms can be changed at any time. If you want out, you will likely have to quit the service. Few probably will.

WASHINGTON – The head of the Federal Communications Commission thinks he has come up with a way to salvage his ambitious national broadband plans without running into legal obstacles that have threatened to derail him.

FCC Chairman Julius Genachowski said Thursday that his agency has crafted a compromise in how it regulates high-speed Internet access: It will apply only narrow rules to broadband companies. The FCC chairman, a Democrat, said this delicate dance will ensure the agency has adequate authority to govern broadband providers without being too "heavy-handed."

But his plan likely wil hit legal challenges from the big phone and cable companies and already faces significant opposition from Republicans at the FCC and in Congress.

The FCC has been scrambling to come up with new regulatory framework after a federal appeals court last month cast doubt on its jurisdiction over broadband under existing rules.

The FCC needs that legal authority for the sweeping national broadband plan that it released in March. Among other things, the plan aims to give more Americans access to affordable high-speed Internet connections by revamping the federal program that subsidizes telephone service and using it to pay for broadband.

Genachowski also needs this authority to move ahead with his proposal to adopt "network neutrality" rules prohibiting phone and cable companies from prioritizing or discriminating against Internet traffic traveling over their lines. Internet companies such as Google Inc. and Skype Ltd. say these rules are needed to prevent broadband providers from becoming online gatekeepers and blocking Internet phone calls, streaming video and other services that compete with their core businesses.

Genachowski said his new regulatory framework will allow the FCC to move ahead with its plans and "support policies that advance our global competitiveness and preserve the Internet as a powerful platform for innovation."

The FCC currently treats broadband as a lightly regulated "information service." It has maintained that this framework gave it ample authority to proceed with its broadband plan and to impose net neutrality rules. But the U.S. Court of Appeals for the District of Columbia rejected this argument.

So now Genachowski is seeking to redefine broadband as a telecommunications service subject to "common carrier" obligations to treat all traffic equally. Similar rules apply to other networks that serve the public, including roads and highways, electrical grids and telephone lines. But Genachowski said he will refrain from imposing more burdensome mandates that also apply to traditional telecom companies. For instance he would avoid imposing obligations for the broadband companies to share their networks with competitors.

The proposal is intended to strike a balance that can satisfy both Internet service providers that oppose new regulations and public interest groups that are demanding greater consumer protections. FCC officials stressed that they intend to regulate only Internet connections, not the online services flowing through them.

The FCC will soon seek public comment on Genachowski's proposal. It would have to be approved by three or more of the FCC's five commissioners, and Genachowski is expected to have the support of his two fellow Democrats.