Nintendo, the games console maker best known for its Super Mario Bros franchise, slashed its sales forecasts on Wednesday, as consumers swapped traditional consoles for games such as Angry Birds which they can play on their smartphones and tablet devices.

The company, which started out making playing cards in 19th century Japan, said that it will only sell around 4m of the Wii-U device, the latest release in its Wii range which aimed to echo the experience of playing games on tablets by giving users a touchscreen controller. It had previously forecast sales of 5.5m in the year to March.

The business now expects to deliver an operating loss of 20bn yen (£139m) for the full year. It has claimed it is likely to return to profit in the current financial year, largely helped by the fall in value of the Japanese yen, but investors still fear for Nintendo’s long-term growth prospects.

The company has been accused of failing to keep pace with its rivals in launching new technology. Some analysts, such as Wedbush Securities’ Michael Pachter, claim it is lagging so far behind that many of its products belong to the last decade. Analysts are also concerned that Nintendo has become “isolated” because it does not have a system of different devices or operating systems, like its rivals Microsoft, maker of the Xbox, and Sony, which produces the PlayStation console.

Meanwhile, profits at camera and printer manufacturer Canon, also a Japanese firm, tumbled 10pc to 224.6bn yen last year, as customers swapped their so-called “point-and-click” digital cameras for smartphones which have them built in. There was still strong demand for cameras with interchangeable lenses, but Canon blamed “spread of smartphones” for a slowdown in sales of its small digital cameras, “not only in developed countries, but also in China and some emerging nations”.

There are already more than 1bn smartphones in use around the world, and that figure is expected to double by 2015, according to research firm Strategy Analytics, prompting a major shift in consumer behaviour.

“We’ve seen big advances from Samsung and Nokia in cameras but the best camera is always the one you have got with you. And the one device that you will always take with you is your smartphone,” said Martin Garner, an analyst at telecoms research firm CCS Insight.

Canon, which saw sales decline 2.2pc to 3.5bn yen, was also hit by the eurozone crisis and a Chinese boycott of Japanese exports, following a territorial dispute last autumn.

But even against the backdrop of soaring demand from technology giants like Apple and Samsung, analysts do not expect demand for standalone compact cameras or traditional games consoles to die away completely.

Smartphones owners might play games and take pictures on their mobile devices at the moment, but in the longer term people are expected to own a range of specialist devices, each connected to the internet.

“There is a big opportunity in devices being connected. The Samsung Galaxy camera is a very interesting device. It is just like a smartphone [in terms of what it can do] but it is designed as a camera first, with a much bigger lens,” Mr Garner said. The Samsung Galaxy camera runs on Google’s Android operating system, and allows users to do things like automatically upload any pictures they take to Facebook in the same way as they can from a smartphone.