In a preview note regarding Nintendo's upcoming fourth quarter fiscal results (to be reported on Thurs.), Wedbush Morgan Securities analyst Michael Pachter said that after attending a recent Nintendo U.S. Media Summit in San Francisco, he "came away with a more positive view on the company." Games such as Mario Kart Wii, Pokemon Mystery Dungeon, and Wii Fit each have "the potential for significant revenue contribution," Pachter added.

Wii Fit in particular is likely going to be a huge factor for Nintendo when it ships in the U.S. on May 19. "Of particular note, we believe Wii Fit... can cause a new boom in demand for the Wii," Pachter said. "This device is not aimed at hardcore gamers, but is instead intended for more casual (and out-of-shape) consumers. We believe that Nintendo of America intends to support the Wii Fit launch with the biggest marketing campaign in its history, and believe that the increased buzz will drive increased demand for the already difficult to find Wii hardware."

As for Nintendo's Q4 and complete fiscal year, Pachter commented, "Nintendo's recent financial performance has been spectacular and we continue to believe its FY:08 operating profit guidance is conservative. Nintendo's Wii (with over 20 million units sold) and DS (with almost 65 million units sold), sold extremely well during the holidays, and we believe the momentum will last in FY:09. We expect the company to report in line with our estimates for revenue of ¥359 billion and EPS of ¥265 due to strong hardware sales, compared to consensus for revenue of ¥357 billion and EPS of ¥200 and company guidance for revenue of ¥314 billion and EPS of ¥126. Recent exchange rate assumptions were overly pessimistic, leading us to conclude that the company may provide some upside to estimates. While we think that Nintendo may take an impairment charge for investments in the U.S., we do not expect exchange rates to significantly impact net income."

Overall, Wedbush is maintaining a "Buy" rating on Nintendo stock. Pachter raised his FY:09 estimate for revenue to ¥1,700 billion from ¥1,450 billion. His earnings per share (EPS) estimate remains ¥2,816. "Our revenue estimate accounts for higher sales of software, and our EPS estimate reflects a lower exchange rate in FY:09," he explained.