At E3, Nintendo will be introducing new hardware, the Nintendo 3DS.
In an official release, Nintendo describes the portable as allowing games to be "enjoyed with 3D effects without the need for any special glasses". It is not yet known how the 3D effects will work, but it is possible that it could work like this Japan-only DSiWare game.
According to Nintendo, the product will go on sale between April 2010 and March 2011.
The Nintendo 3DS will succeeded the Nintendo DS series and will have backward compatibility for Nintendo DS and DSi games. It is important to stress that the Nintendo 3DS is a new hardware series.
In early January, Nintendo President Satoru Iwata gave an interview with Japan's second largest newspaper The Asahi Shimbun in which he apparently said the Nintendo DS successor will have "highly detailed graphics, and it will be necessary to have a sensor with the ability to read the movements of people playing".
Nintendo of America later told Kotaku that the Asahi Shimbun had "misinterpreted" Iwata's remarks. "Mr. Iwata did not make any comments regarding the functions of Nintendo's future hardware systems," Charlie Scibetta, Nintendo of America's senior director of corporate communications told Kotaku. "The answer to the reporter's question was misinterpreted."
The Asahi Shimbun stands by its reporting and issued a statement to Kotaku Japan that read: "The article quoted Nintendo President Satoru Iwata's comment accurately." The actual quote in the article is a fragment of a longer sentence.
At a Nintendo quarterly Q&A, the exec addressed the issue with the Asahi Shimbun, asserting that the reporter stated, "The graphics for the next DS will be highly detailed and it will contain a motion sensor, right?" Iwata claims he then replied, "Those things are naturally being required. But do you think it would sell with just that?" Iwata emphasized that this last part was left completely out.
It appears that the extra element Nintendo believed was necessary to really sell the DS successor is 3D.
Regarding 3D, Nintendo president Satoru Iwata has previously stated that Nintendo would need to look into the "possible health effects" of playing video games in 3D for prolonged periods of time.
Here is a handy summary of what we know about the Nintendo 3DS (and what we think we know).
Launch of New Portable Game Machine [Nintendo Japan]