Sometimes in life you encounter something so monumentally lacking in common sense that you just have to share it. Because otherwise you couldn't bring yourself to believe that it actually was real. And because in the end, its just too hilarious not to. You end up asking yourself, "Do people actually believe this?" The video I'm about to show you is one of those things.
I believe it speaks for itself;
Okay, are you done laughing? because now I'm going to explain exactly how this is ludicrous. First of all, why would a major game company like Nintendo, with a "family friendly" image to uphold, include any sort of political message in a game designed for children? Much less one so likely to be controversial among the sort of people that "news" stories like this are designed to appeal to, as an endorsement of big, bad Islam? The answer is that they would not. They have too much to protect in terms of brand image.
Secondly, notice that the newscasters tell you what the doll says before you even hear it for yourself. The recording used by both the doll and the game does appear to say something, but as this article from urbanlegends.about.com says, the recording used for both the doll and the game is total gibberish. Its only when the reporter suggests the phrase "Islam is the light" that the viewer picks up on it. It's the same trick, in principle, that paranormal investigators use with so called "electronic voice phenomena." (The supposed "voices of the dead" recorded on audio tapes) The investigator will suggest that he hears a certain phrase in a recording of ambient sound taken in an empty room, i.e. "GET OUT", or some such nonsense. Only after the phrase has been planted in the minds of the audience will he actually play it back. It's a very common trick, and is used in almost every episode of "Ghost Hunters." Note that I'm not suggesting that anyone did this on purpose in this case. I'm just illustrating how people sometimes recognize patterns that aren't there. Well readers, that's about all I have to say about that. Monday's Penny-Arcade sums up my opinion very nicely.