The company has sent out cease-and-desist letters to those suspected of piracy and an Australian Federal Police taskforce has been engaged.

The hand-held Nintendo DS is expected to be one of the best-selling items put under the Christmas tree again. Company officials predict sales of 750,000 by the end of the year.

Australia has followed a global trend towards parents buying the pirated gaming software on R4 chips. These chips bypass the DS's security system and allow users to play multiple pirated games illegally downloaded from the internet.

The R4 is built to fit into the DS's existing game cartridge slot and will transfer onto the console anything saved on a removable flash memory chip.

Most DS games can be downloaded from the internet within a few days of the legitimate version going on sale. Videos on YouTube.com offer first-time users an easy-to-follow guide.

Nintendo director of marketing Greg Arthurton said the company was taking steps to protect its intellectual property and copyright from being infringed. It had sent out letters to backyard operators in Australia who were selling equipment that allowed users to play pirated games on Xbox and Nintendo DS.

An AFP task force was monitoring online sales, with IP addresses of those selling illegal consumer electronic gear tracked. The AFP was also investigating sales of pirated goods on eBay.

Cyber safety commentator Tom Wood said Nintendo should consider bringing down the prices of its game cards, which can cost as much as $70 each. "Although there is no excuse for pirating, it may help bring down the rate of pirating, as the prices are pretty excessive and indeed would be out of reach for many parents."

Yvonne Wallbank, a mother of three boys, said the "horrendous" cost of the of the Nintendo game cards was driving many parents to resort to piracy.

Each of her three sons, Maxx, 12, Alex, 10 and Nick, 8, has his own Nintendo unit.

Mrs Wallbank said her sons had to use their pocket money to buy the games cards.

"I can understand why parents use the pirated games. But as the owners of a small computer-related business I don't believe in cheating people of their rightful income," she said.

Interactive Entertainment Association of Australia chief executive Ron Curry rejected suggestions that the piracy of products was related to price. He said evidence suggested piracy was becoming more common for all products regardless of their pricing structure.

"This is not a price-related debate," he said. "This is about the future protection of overall intellectual rights."

hgilmore@fairfax.com.au