I'd like to own Nintendo (OTC: NTDOY), but there are a couple things that bother me about the current chapter of its amazing story. First, let me take a look at a report about the video-game juggernaut's earnings.

According to The New York Times, Nintendo's profit number was one for the record books. Sales soared to the sky, rocketing 73% to over $16 billion. Net profit also went ballistic -- in a good way -- by about 48%, coming in at $2.5 billion. Yeah, the Wii console was a big driver, but don't forget that little handheld wonder called the Nintendo DS -- people sometimes miss that part of the tale, and they shouldn't. The DS sold over 30 million units on a global basis during the fiscal year, while the Wii sold over 18 million units. Yep, Sony (NYSE: SNE) and Microsoft (NASDAQ: MSFT) still have something to worry about, as the Wii has taken the shine away from the PlayStation 3 and the Xbox 360. The company's position in the current gaming cycle is strong, no question. And publishers like Activision (NASDAQ: ATVI) and Electronic Arts (NASDAQ: ERTS) all strive to be big supporters of Nintendo's systems.

Here are the problems, though, that I alluded to at the opening. First, as of this writing, the ADR's are, according to AOL Finance, priced at $71.14 (the ADR's don't change during the day on this quote system, as they update after the close; I'm seeing a current bid on my brokerage's quote system of $68.50, so the shares might possibly go lower tonight). This represents something of a recent run-up, so I'm not interested in chasing the stock at these levels (last time I was interested in Nintendo, there was a price drop). But, there could be a more pressing issue -- on an anecdotal level, in my area, the Wii's are currently plentiful. Has the system peaked? Hey, don't go by my anecdotal observations, but I'm just saying that, for me personally, buying Nintendo at this time is something I'd have to consider very, very carefully.

Disclosure: I own shares of Activision; positions can change at any time.

Microsoft's (NASDAQ: MSFT) Halo 2 video game racked up sales of $125 million the day it hit the market. The world's largest software company believes that sales of the new Halo 3 game will be even larger. Aside from a version of the game for the Xbox 360, there will also be a Halo 3 for the Microsoft Zune.

According to one video game review publication, the newest version of the game is meant to fend off competition for the Sony (NYSE: SNE) PS3 and Nintendo Wii.

Video game industry experts say that Halo 3 has four million pre-orders from retailers, compared with 1.5 million for the launch of Halo 2. If that is true, it may add to the troubles for the already shaky start of the new PS3. Most surveys show the new Sony platform's sales lagging the unexpectedly popular Wii and the Xbox.

Wall Street and the gaming industry did not expect that Xbox, which was launched in late 2001, had much of a chance of catching Sony. The Japanese company simply had too large a lead. But, it is now Sony that is struggling to move back into first place. PS3 problems have even been blamed for the departure from Sony of PlayStation creator Ken Kutaragi.

The Microsoft way is to enter a business, out-develop and out-spend competition, and then finish them off. It seems to be working against Sony.

Douglas A. McIntyre is a partner at 24/7 Wall St.