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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