Nintendo announced that it expects annual profit to more than double this year on strong sales of its DS-branded handheld games console and software.

Nintendo said that new software titles like Nintendog, which is a pet training program, has opened up sales to female and elderly users.

Specifically, estimates for DS handheld devices have now been upped by 15% to 23 million units up to March. DS Software sales are also expected to reach 100 million units, surpassing earlier estimates of 82 million.

The Kyoto, Japan-based company has now raised its overall operating profit forecast by 28% to $1.6bn (185bn Yen). It had previously estimated $1.2bn.

Last year Nintendo posted a profit of $755m.

Confident that profits will surpass previous forecasts, investors sent Nintendo shares up nearly 2.5% at the close in Tokyo yesterday.

Nintendo’s optimism is in stark contrast to that of Tokyo-based Sony which has been plagued by delayed product launches, supply problems and missed its global shipment targets into the crucial run up to the holiday season. As a result of these woes, Sony says its games division will report a loss of around $1.6bn.

Sony’s stock fell 2% yesterday.

PlayStation Portable is Sony’s competing offering against DS. The product badly missed its sales targets.

Indications are that sales of Nintendo’s new Wii games console are also outstripping rival Sony’s PlayStation 3 system

Nintendo has also raised its sales forecast for its new Wii games system as well. It raised its Wii software sales estimates by 23% to 21 million units. Meanwhile its original console target remains the same at 6 million units.

Nintendo raised its forecast despite issues of a recall of flying Wiimotes that came to the fore in December. That was caused by a faulty straps attached to the system’s motion-sensor controllers. While the cost of the recall could run into several hundred million Yen, it apparently has not impact sales as adversely as was first feared.

New research by Enterbrain Inc shows that 989,118 Wii units were sold in Japan in December, which is nearly double that of 466,716 PlayStation 3 units shipped since early November to the end of December.

That figure falls well short of the 1m consoles that Sony had expected to ship in Japan by the end of 2006. Sony however said that it met its 1 million target for PlayStation 3 in the US for 2006. But overall it is still well short of its global shipping target of 2m.

Sony said that PlayStation 3 will start shipping the system in Europe sometime in March.

Both Nintendo and Sony expect to sell 6 million games consoles by the end of March.

Wii also competes against Microsoft Corp’s Xbox 360 system as well. Xbox has sold less than 300,000 units in Japan since it hit the market back in December 2005.

Wii is the cheapest system retailing at $250. High-end PlayStation 3’s sell for as much as $600 while the premium version of Xbox 360 is priced at $400.

While the latest figures make depressing reading for Sony, it still leads the video games console market with 70% share thanks largely to the endearing popularity of its PlayStation 2 console, especially in the US, which has sold over 35 million units to date. Xbox comes in second with 15 million units, while Nintendo’s older GameCube trails in third with only 11 million units.