I know, I know. There are some investors out there who love Nintendo (OTC BB: NTDOY.PK). In fact, David Gardner picked the stock as a Motley Fool Stock Advisor recommendation, so if you're among them then you're in good company. And yes, the stock is pretty much at a 52-week low. But none of this convinces me that you should buy it now. Here's why.

For a start, Japanese shares have rallied quite impressively off their March lows, but Nintendo did not take part in the fun. If the stock can't grab investors' attention in the biggest equity rally in 12 months, then when will it?

Probably not any time soon. Sales of Nintendo's once white-hot Wii console slumped in the U.S. by a record 52% in April. Stores moved just 340,000 units versus 714,000 in the previous year as a retail sales slowdown was led by a significant decline in electronic goods.

That might present a unique buying opportunity were it not for the fact that Nintendo has no new ultra-cool products on the horizon, as competitors are lining up to take air-punches at its rapidly saturating releases.

Most recently, Microsoft (NASDAQ:MSFT) is rumored to be developing a video camera for its Xbox 360 which will give users a Wii-like experience as they control games with their own body movements. The idea is intriguing: Imagine how it could compliment Activision Blizzard's (NASDAQ:ATVI) Guitar Hero 5 release, which lets players add as many different instruments as they like to their virtual bands, while jumping seamlessly in and out of the game. Imagine being able to pose and rock out while a camera scores extra points for the users who copy on-screen rockers.

In this framework the camera concept could possibly capture movements more accurately than the Wii, opening up new game designs for developers to tinker with. (To be fair, however, Nintendo's foray into the hit Guitar Hero series has proved successful in its own right).

A new version of Sony's (NYSE:SNE) Playstation 3 is expected to have the same body-sensor features embedded. That may be unveiled as soon as next month. And rumor has it that Sony is also developing a slimmer, cheaper version of the PS3 in response to today's more frugal economic environment.

Among handheld devices, Nintendo's DS isn't immune to competitive threats, either. Apart from battling Sony's PSP, Apple (NASDAQ:AAPL) is making headway by rolling out games on its iPhone and iPod Touch devices. Apple's new iPhone release is expected to incorporate more features -- such as expanded memory -- to better accommodate its range of cut-price App Store games.

In video games, sometimes it's better just to admit defeat and move on to the next level if you can't get past the current one. Not that Nintendo's been "defeated" in this current round of Console War, but the torrid growth that sustained its share gains seems to be waning. With the ever-increasing competitive landscape, so it may be with investing in Nintendo. Its shares have performed poorly this year for a reason, and I'd want to see improving fundamentals before jumping in.

Fool contributor Daniel M. Harrison owns no companies mentioned in this article. Apple, Activision Blizzard, and Nintendo are Motley Fool Stock Advisor recommendations. Microsoft is a Motley Fool Inside Value pick. In addition to being a stock advisor favorite, Nintendo is also a Motley Fool Global Gains recommendation. The Fool's disclosure policy can play "Final Wars" by Buckethead on Guitar Hero II's expert level with a beer in one hand and still get a "99% notes hit," because, yeah, it's awesome like that.