May 23 (Bloomberg) -- Nintendo Co., the world's largest maker of handheld game players, expects to sell as many as 35 million Wii consoles in the U.S. and approach the record 38.2 million PlayStation 2s sold by Sony Corp. Shares of Nintendo rose.

The company will reach its goal by 2011 or 2012, George Harrison, marketing chief at Nintendo of America Inc., a unit of Kyoto-based Nintendo, said in an interview from Seattle yesterday.

Nintendo is increasing Wii production at factories in China to meet demand, Harrison said. Tokyo-based Sony said last week it will introduce 34 new games in the next year to spur sales of its latest PlayStation 3 console, which is outsold by the Wii by about two to one.

``The 35 million target is a bit too optimistic for now as it seems the Wii is targeting light gamers, but the U.S. market has a lot of hard-core game players,'' said Etsuko Tamura, an analyst with Mizuho Investors Securities Co. in Tokyo. ``It's too early to decide whether the Wii will be the winner among game consoles.''

She has a ``neutral plus'' recommendation on Nintendo and doesn't rate Sony shares.

Nintendo's stock rose 3.2 percent to 42,100 yen at the 3 p.m. close on the Tokyo Stock Exchange, while Sony shares declined 0.7 percent to 7,100 yen. The benchmark Nikkei 225 Stock Average climbed 0.1 percent.

Swinging Controller

The PlayStation 3 has a Cell processor that is 40 times faster than the chip used in the PlayStation 2. The machine also has enhanced graphics and more lifelike characters over the Wii, which features a motion-sensor controller that allows users to replicate movements like swinging a tennis racquet on screen.

Sony earlier this week said it will start selling PS3 in South Korea on June 16 at 518,000 won ($556) each. The version will be equipped with a 80-gigabyte hard disk drive.

Nintendo sold 2.5 million Wii players in the U.S. since the console was introduced in November, making it the top seller among the newest generation of machines.

``Demand is much greater than we anticipated,'' Harrison said. ``A year ago no one thought we would be in this position.''

U.S. consumers have purchased 1.3 million PlayStation 3s since it was introduced two days ahead of the Wii. Microsoft Corp. sold 5.4 million Xbox 360s, released in 2005, according to market researcher NPD Group Inc., based in Port Washington, New York.

The older PlayStation 2 remains popular, outselling both the PS3 and Xbox 360 in April. Consumers bought 194,000 PS2s during the month, according to NPD. That compares with 174,000 Xbox 360s and 82,000 PS3s. The Wii was No. 1 at 360,000 units.

Price Cuts

Demand for the PS2, introduced in 2000, has been bolstered by price cuts and the popularity of games such as Activision Inc.'s ``Guitar Hero.'' The console sells for $149.

Pricing also helped sell the Wii. At $249, it costs less than half the price of a PlayStation 3 and is about $50 less than the cheapest Xbox 360. Nintendo has no plans to sell the Wii for less, Harrison said.

Nintendo on May 21 said it plans to introduce 14 new games for the Wii, including the in-house title ``Mario Strikers Charged'' and ``Boogie,'' which allows players to sing and dance to music videos. The new games will be released in the third quarter.

Most of Sony's new titles follow traditional genres such as the action-adventure ``Uncharted: Drake's Fortune,'' in which treasure hunters battle modern-day pirates in the South Pacific, and the fighting game ``Heavenly Sword.'' The company also unveiled ``SingStar,'' which allows two players to sing along with music videos by artists including U2 and Britney Spears.

Game Software

Nintendo makes 70 percent of its game software, while Sony produces 15 percent of what it sells, making a ``big difference to profitability,'' said Yuuta Sakurai, a Tokyo-based analyst at Nomura Securities Co. He rates Nintendo shares ``buy'' and doesn't have a recommendation on Sony.

Nintendo will continue to focus on titles that attract people who typically don't play video games. That means there is little reason for the company to upgrade the console with more powerful chips or better graphics, Harrison said.

``We're starting to see in the performance of the PS3 and Xbox 360 that that's not necessarily motivating the market the way it used to,'' he said. ``So we're going to start work on future technology only when we believe it's necessary.''

To contact the reporter on this story: Michael White in Los Angeles at Mwhite8@bloomberg.net.

Last Updated: May 23, 2007 02:40 EDT