Analyst: Nintendo shot DSi XL in foot

Announcement of 3DS may have killed a number of US handheld sales

Nintendo Japan may have hampered sales of the DSi XL with its untimely announcement of the 3DS, according M2 Research analyst Billy Pigeon.

Pigeon believes that the Japanese announcement, made only weeks before the release of the DSi XL in the US, will kill a sizeable amount of demand as gamers avoid buying into a handheld they think will be obsolete soon.

"Apparently, the Japanese press was all over it and talked with suppliers there and Nintendo just wanted to get out ahead by breaking the news to prevent a leak," Pigeon told CNBC. "Does it clash with the DSi XL? Yes it does. The XL is old news, however, in Japan - and Nintendo is a very Japan-centric organization. This is just the corporate parent in Japan maybe not acting in the best interest of Nintendo of America."

However, Pigeon said he still expected sales of the new DS to be robust, adding that he believed it could pave the way for a price cut to older models.

"It gives them a reason to bring down prices on the DS from a position of strength," says Pilgrim.