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The largest online retailer Amazon.com Inc. (AMZN - Analyst Report) has recently introduced an Instant Video app for Nintendo’s (NTDOY) Wii U home console.

The app will enable Wii U owners to buy, rent and stream more than 140,000 movies and TV episodes from Amazon’s Instant Video Store. Moreover, Amazon Prime customers can enjoy more than 30,000 movies and TV episodes for free.

The Instant Video app will be located in the Wii U eShop. Console owners can search and browse their favorite movies and TV shows with the help of the Wii U’s 6.2-inch touch screen GamePad controller.

Wii U is Nintendo’s first console upgrade in six years since the release of Wii. In addition, a seventh-generation console, Wii U is Nintendo’s first offering with HD graphics. The earlier version, Wii, competed against other gaming console manufacturers such as Microsoft's (MSFT - Analyst Report) Xbox 360 and Sony's (SNE - Snapshot Report) PlayStation. Until September 2012, 97.18 million units of Wiis were shipped worldwide, followed by 70.2 million PlayStations and 70.0 million Xboxs.

Amazon’s unique offering may entice gamers, as they can watch their favorite movies and TV shows while playing games on the console. This app is expected to be well received by both parents and kids as they can watch family-friendly programs. This will allow the viewers multiple screening options for viewing their favorite shows from Amazon.

An Amazon app in a gaming console is a smart marketing strategy by the e-commerce giant. The strategic partnership may open up new and exciting screening devices where people will get more chance to buy or maybe rent what they want to see while playing and enjoying their games. Nintendo launched the gaming console just before the holiday season. Thus, Amazon can largely benefit as demand usually goes up during the holiday season.

A study by IDC suggests that there will be 257 million active gaming consoles worldwide by 2015.  Banking on the higher demand for gaming consoles, Amazon may have an opportunity to expand further via these kinds of partnerships in the future.

Amazon’s third quarter revenue was $13.81 billion, up 7.6% sequentially and 26.9% from the year-ago quarter. This was better than management expectations and more or less in line with the Zacks Consensus Estimates. Excluding unfavorable currency impact, revenue increased 30.0% year over year.

Currently, Amazon has a Zacks #4 Rank, which implies a Sell rating. Nintendo and Sony carry a Zacks #2 Rank, implying a Buy rating in the short term. Microsoft carries a Zacks #3 Rank, implying a short-term Hold rating.

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