Now that the 3DS has been through its first holiday season, Wedbush Securities analyst Michael Pachter says he is much more optimistic about the future of Nintendo's latest handheld, even though it may never catch up to its successful predecessor.
"Now that we are seeing more first party titles at a lower price point, sales have increased. It's definitely turned the corner," he said.
While the platform's sales are looking strong, Pachter says the growing smartphone market will make it difficult for the 3DS to ever compare to the original DS, which was incredibly popular with casual consumers.
"The emergence of smartphone games is eroding the casual market's support for dedicated gaming devices, and I'd guess that 30 percent or more of DS sales were to casual gamers. That makes it tough to compete," he said.
"At the high end, we have renewed competition from Sony with PS Vita, so they should nibble away at the hardcore, leaving Nintendo an addressable market for 3DS that is around 60 percent as big as the addressable market for DS."