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Nintendo (OTCPK:NTDOY) were in a bit of a corner with the sudden spurt of growth in the smartphone market and the associated application stores. From a strategic marketing perspective, Nintendo had a desperate need to differentiate themselves from these new competitors. And 3D is that differentiator.

They are saying that the new device is backwards compatible, so it is basically a DS with 3D bolted on. They say you don’t need special glasses, but this is also true of upcoming television technology. The above video trick is 3D using the camera to tell the game about movement. The new machine must do a lot better than that.

I have written before about layering OLED screen technology to create 3D. (In fact I thought the iPad might use it.) This is eminently achievable and the technology is out there and ultimately inexpensive, the manufacturing process is mainly lithography. The main upgrade for the DS will be the technical ability to produce twice as much video output in order to create the stereoscopic 3D imagery.

Regular readers will know that I think the Dual screen, clamshell layout of the DS will catch on with far more portable devices, it doubles screen acreage for a given device size, and screen acreage is critical. But where Nintendo really need to go is to build in a phone. If they don’t they will eventually lose to those portable gaming devices that offer the extra functionality.

As for 3D, it is looking less and less like a fad in the gaming world. Sony (NYSE:SNE) and Nintendo have now both firmly laid down their intent, so that leaves Microsoft (NASDAQ:MSFT) dithering and Apple (NASDAQ:AAPL) sidelined by their planned obsolescence policy. Time will tell us who is right. The stereoscopic 3D experience is definitely more immersive, which is exactly what gaming needs, so it is just a matter of getting the technology and the games right.

Disclosure: No positions

Source: Nintendo Differentiates by Introducing 3DS, The First True 3D Console