Nintendo 3DS
A woman buys Nintendo's 3DS game player at an electronic store on the launch day in Tokyo February 26, 2011. Game fans jostling to be among the first to buy Nintendo's new 3D-capable game player thronged stores in Tokyo Saturday, but longer term competition from smartphones and tablets may still squeeze demand for the latest Nintendo gadget. Reuters

Retailers are expecting a strong demand for Nintendo's latest and greatest portable handheld, the 3DS, but a stiff economy and even tougher competition may make for a tepid reception.

The Japan-based company, whose growth has been flagging, is making a big marketing push as it launches the Nintendo 3DS, the first device to offer 3D gaming without special glasses. The device hits shelves on March 27, and will be priced at $250.

Amazon is already claiming that the Nintendo 3DS was the biggest console launch ever on It sold more units on January 19 - the day it was announced - than any console had before.

Software retailer GameStop is opening its doors at midnight that day to meet what it anticipates to be strong demand.

Demand has been so strong that, literally, we are working every day with Nintendo to ensure that we have sufficient product, said GameStop's President Tony Bartel during the company's earnings call. And they have been very good partners on this, and we fully expect to have sufficient product at launch; the demand is very strong.

Nintendo expects to ship about four million 3DS units worldwide by the end of March, and said 1.5 million of those will likely be in Japan.

The original DS went on to amass nearly 50 million units sold since the original was launched in 2004, making it the best-selling video game system of all time.

But it's unclear whether consumers will be willing to upgrade to the new system in-light of a recovering economy and a diversifying marketplace.

While the economy is generally recovering, high unemployment and higher food and gas prices are forcing consumers to spend less than before the crisis.

The new 3DS, priced $100 more than the original, may present a sticker shock for those expecting an upgrade at the same price point. Games are expected to be $10 more at $39 as well.

The system is also being position as more of a full-purpose entertainment product, but it will face competition from many similarlly positioned tablets smartphones. Indeed, while Nintend is launching on March 27, Apple rolled out its latest tablet, the iPad 2 to 26 markets on the 26th.

Arch-rival Sony is also launching a next-generation handheld gaming device -- code-named NGP -- at the end of the year which boats powerful hardware and innovative controls that some may end up waiting for.