The Nintendo DS has been highly successful in Japan

Nintendo raised its profit forecast by 28% to 185bn yen ($1.5bn; �670m) for the year to 31 March. The firm reported profits of 90bn yen last year.

Nintendo said it expected to sell 23 million handheld DS consoles by the end of the current financial year.

The Wii, is competing against Sony's Playstation 3 and Microsoft's Xbox 360.

The BBC's business editor Robert Peston said that the Wii was the winner in the game wars at the end of 2006, outselling Sony's Playstation 3 in Japan by a wide margin.

Separate industry figures suggest Sony could have missed its target of selling 2 million Playstation 3 consoles worldwide in 2006.

The firm sold 466,716 of the consoles in Japan between 11 November and the end of the year - short of its domestic target of 1 million, according to Japanese computer game publisher Enterbrain.

'Flying start'

The DS console, which opens like a book and allows users to control play with a stylus, has proved popular with women and the elderly.

Hiroshi Kamide, an analyst at KBC Securities, said Nintendo's earnings upgrade "underlines the strength of the DS and that the Wii is off to a flying start".

"At this rate they are going to be a 1 trillion yen sales company next year, which is pretty amazing," he added.

Nintendo previously forecast profits for the current year of 145bn yen.

Nintendo games are best known for characters such as Mario, Pokemon and Donkey Kong.