For a long time the handheld gaming market has been dominated by the console manufacturers: Nintendo, Sony, et al. However, now we’re looking at a different market where smartphones have begun to penetrate deeply into that territory. In order to strike back at this new threat from outside has sought to develop a brand-new technology that phone developers may not tread lightly: 3D gaming displays.

An article in the New York Times Bits blog covers some of the finer points of the upcoming Nintend 3DS handheld system as presented during a recent demo,

Portable gaming devices are facing a stiff challenge from smartphones, which allow users to play casual, inexpensive games on devices that many people already own. With a 3-D system that can fit into a pocket, Nintendo can provide something that smartphones cannot. The device opens up to reveal two screens, the 3-D screen and a touch screen operated with a stylus. A sliding control on the side of the screen allows people to change the depth of the 3-D display to make it more comfortable, or turn it off completely.

Several game designers were on hand at the event, displaying 3-D versions of popular games like Madden NFL, Street Fighter and Resident Evil. Game developers are also taking advantage of other aspects of the device. The 3DS version of Nintendogs + Cats, for instance, uses the 3DS’s camera, paired with facial recognition software, to allow people’s virtual pets to recognize their owners and react to familiar faces or to strangers. When building an avatar — a Mii — a user can start with a digital interpretation of her own face. And in Steel Diver, a submarine game, a user operates the periscope of a submarine by physically rotating his body.

We’ve already seen the Nintendo 3DS emerge from rumors into a fully fledged demonstrable system. In light of Nintendo’s flagging profits, they began to float the 3DS as their eventual savior—sort of the Nintendo Wii of the handheld universe. This only flooded out even more speculation about the direction the company intended to take their marketing and manufacturing with the production of the 3D device.

The Nintendo 3DS has a release date set for March 27, 2011 and now a set cost of $249 USD. We can expect at least 30 games to be available for the device by late June. Including some that will take advantage of the depth-sensing cameras (who here thinks we might see Nintendo attempting to mimic a handheld Kinect?)

This seems to be especially apparent in the self-portrait Mii application that will roll out with the device.

Also on the block, the Nintendo 3DS will be equipped with radios so that the devices can communicate when they’re nearby one another. We’ve seen this concept appear in many different handheld platforms and it’s an excellent scaffold to build social gaming on. Ideally, however, the 3DS will also have to contend with why smartphone games happen to be so powerful and it happens to be the social aspect. Smartphones have a communication capability already built in and while the 3DS will probably have wireless Ethernet capability, it will have to contend with the fact that smartphones are capable of uploading and interacting with other smartphones from anywhere they can get service.

Still, the 3D aspect of the 3DS will make this new Nintendo handheld a real market phenomena.

And, because this is Nintendo, I expect that it won’t be treated as just a passing gimmick.