Strong Wii sales help power Nintendo earnings

Nintendo (OTC: NTDOY)'s Wii gaming system is truly a craze that has swept many nations. Older generations like the physical aspect to the games. Younger generations love it. Even people who have never liked video games (yours truly included) are fascinated by the technology. And 13 months after the Wii was introduced in November 2006, it remained one of the hot-ticket items for the holidays. Lines were long, eBay Inc. (NASDAQ: EBAY) prices were through the roof, and demand was insatiable.

The continued success of the Wii (and the DS portable game device) helped lift Nintendo Co. profit to 258.9 billion yen (or $2.43 billion) in the April-December reporting period. This compared quite favorably to the 131.9 billion yen earned in the previous year. Sales were 85% higher during the nine-month period to 1.32 trillion yen.

The Wii has outsold its primary competition: the Sony Corporation (ADR) (NYSE: SNE) PlayStation 3 and Microsoft Corporation (NASDAQ: MSFT)'s Xbox 360. In fact, 18.5 million Wii units are expected to fly off the shares this business year, which ends March 31. This is above Nintendo's October forecast of 17.5 million units. Even with an economic slowdown in the air, the Wii is one device consumers are willing to pay for. Additionally, the company boosted its overall sales forecast to 1.63 trillion yen from 1.55 trillion yen. In the previous year's reporting period, company sales hit 966.5 billion yen.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.