Nintendo's ascendance in the $30 billion videogames market was underscored today when it overtook archrival Sony, a company with eight times more revenue, in terms of market capitalisation.

Shares of Nintendo, hit a record 46,350 yen, boosted by soaring sales of its Wii console, valuing the company at 6.57 trillion yen (£27 billion). Mid-session, Sony shares had faded, pushing the group's value down to just below 6.5 trillion yen amid concerns over flagging sales of the loss-making PlayStation 3.

The moves briefly awarded Nintendo a place among Japan's ten most valuable listed companies, joining Toyota, the world’s largest carmaker.

Shares in Nintendo, also benefiting from the success of its handheld DS machine, its best-ever-selling console, later eased back. The group finished the day in eleventh place among Japan's corporate giants, above Matsushita but below Sony, the world's two largest consumer electronics makers.

Nintendo's public upstaging of Sony again ratchets up the pressure on Sir Howard Stringer, the Sony chief executive.

Sir Howard recently ousted Ken Kutaragi — the "father of the PlayStation" — as head of Sony Computer Entertainment, the division that won out in the last cycle of console wars and became Sony’s largest earner. He was replaced by Kazuo "Kaz" Hirai, a former music business executive who has already moved to bulk up the number of titles available on the PS3 in a bid to win more users.

Mr Hirai faces an uphill task. Nintendo recently said that it had sold about six million Wii consoles globally since the machine's launch in November and was targeting sales of 14 million this year. Takeshi Koyama, an analyst with Mizuho, last week suggested that Sony could struggle to sell between five and six million units of the PlayStation 3 in the whole of 2007.

Sony shares have gained about two thirds over the past two years compared with a fourfold increase for Nintendo.

The performance has mirrored the companies' bottom lines. Nintendo's profits grew by 77.2 per cent in the first quarter of this year, to 174.3 billion yen. Sony profits edged forward by a shade more than 2 per cent to 126.33 billion yen in the same period.

Sony executives have stressed, however, that the PS3, with its powerful cell processor and built in Blu-ray next generation DVD system, remains a long-term bet and, in private, point out that the launch of the PS2, which went on to be the world's best selling games machine, was also fraught.

Based on today's closing prices, Nintendo's forward price-to-earnings ratio stands at 36.5, compared with 20.3 for Sony.

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