Game piracy chips like R4 cartridges are to blame for a nearly 50 percent drop in European software sales in recent months, Nintendo claims.
R4 "flash carts" allow users to download and play pirated Nintendo DS games, although a report in Japan's Asahi Shimbun points to a larger issue with "magicom" (magic computer) devices that enable users to pirate console software in general.
Nintendo says it loses trillions of yen a year thanks to software piracy, while according to the report, the problem is exacerbated by the fact that the devices are so prevalent that users commonly don't feel they're doing anything wrong.
The company reportedly found 238 million occurrences of software piracy during June 2009 alone, simply based on its monitoring of 10 overseas websites that enabled users to download games illegally.
In January, analysts like Wedbush's Michael Pachter and EEDAR's Jesse Divnich specifically noted the impact of piracy on Nintendo DS software sales, particularly in Europe, and both analysts felt the increasing losses would be a key figure motivating a hardware redesign. Nintendo is at work on a new portable, the currently-titled 3DS, although details on the hardware itself are few.