MARCH 23, 2010 • Nintendo Co. Ltd. has announced that a replacement for the DS handheld will be launched before the end of the fiscal year ending March 31, 2011. Code-named Nintendo 3DS, the new unit will support 3D graphics without need of special glasses, and will be backwards compatible with all existing DS titles. Japan’s Nikkei newspaper reported that Nintendo plans to give the new system a 3-D joystick and a force feedback mechanism that will let players feel the collisions of a game character, based on related patents at the end of last year. Nikkei says the gamemaker is also considering employing an accelerometer so that games can be played by tilting the 3DS.

Impact: In the late 2009 DFC Intelligence reports The Market for Portable Video Games, The Market for iPhone and iPod Touch Games and Applications and Worldwide Market Forecasts for the Video Game and Interactive Entertainment Industry, we caused somewhat of a stir by our forecasts that revenue from iPhone/iPod Touch games would pass Nintendo DS revenue in the next few years.  However, what most people missed out on was our forecasts of growth for new dedicated game systems from companies like Nintendo.  The category we call other dedicated portable includes our forecasts for new game systems that we are not yet sure of but need to estimate in order to determine overall market impact.  For this reason DFC has started updating its forecast three times a year to account for the rapid introduction of new systems into the marketplace.  As we get closer to launch on a system like the Nintendo 3DS we will be able to get a better read on the market potential.  Right now, our upcoming April forecasts are actually slightly lowering “other portable” and raising forecasts for iPhone and non-game dedicated portable devices.