I'm actually kinda surprised, I didn't know this before but Dragon Quest X on the 3DS is actually streaming to the 3DS, when you buy the game there is no physical cartridge. So it's pretty much the same as Sony's Playstation Now service. 

That means the graphics are better than what a 3DS game would be able to produce:

https://www.youtube.com/watch?v=nyeuGsJMrzw

Looks like it plays ok. I've heard there are hiccups in Japan like people server problems and game font not reading well on the 3DS screen, but it does seem to work. 

Wonder if this is their plan for Dragon Quest XI on the 3DS too ... if they stream it, it could have PS3/PS4 level visuals on the 3DS. 

Hmm, I wonder if it will run better on the n3ds cause of the increased download speeds on it

That is more than likely. WHo knows though, it could be the reason the N3DS has a new processor and not just a more button variant of the old 3DS

Dragon Quest XI will probably be a multi-plat title I think. This seems like it's a test to iron out issues with streaming a game to the 3DS. 

PS3/PS4 + 3DS (via streaming) + possibly Nintendo Fusion (2016?). Maybe a Wii U version too.

That could be a way for them to score the usual 3-4 million in sales while still having a high graphical fidelity for the game. 

Wait, how's he doing that?

It's not running on a 3DS, that's why it looks better than the average 3DS game. It's probably running off a PC or a Wii/Wii U and then streamed to the 3DS.