Nintendo and Japanese rival Sony Corp. with its PlayStation Vita handheld are fighting tough competition from smartphones and tablets, which allow users to not only play games but also spend time on social media and other entertainment.
The bigger screens may help differentiate Nintendo's handheld from other devices, but the upgraded screen is still smaller than the iPad.
Iwata has repeatedly shrugged off the threat from smartphones.
"Nintendo doesn't want to compete in a sector other than where it feels its strength lies," said Tsunoda.
Nintendo has sold 17 million 3DS machines worldwide so far. Sony has sold 1.8 million of its PS Vita machines.
Nintendo is also planning a new home console called Wii U for later this year. It will have a 6.2-inch touchscreen controller that works separately from what's on the TV monitor. But it won't work as a portable like the 3DS or 3DS LL.
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