Smartphones and tablets will keep making sure the market for handhelds shrink even more

Tax hike in japan, small release of games and not being the shiny new consoles has hurt the 3DS. Thankfully, the 3DS has somewhat rebounded in Japan (with Yo-kai Watch, MH4G and N3DS) and Pokemon + Smash has helped it in the west.

If Nintendo plays their cards right with the launch of the New N3DS in the west combined with a few solid titles to maintain momentum, it should have a decent enough 2015.

It mostly reached it's audience, the game sold to the userbase. New 3DS might bring more sales, because it partly sells to people already owning a 3DS.

Quoted for truth.

It was, honestly. There were a few gems here and there, including on the 3DS, but this year was weaksauce compared to last year.

3DS is down for several reasons.
3rd party support in the West is pretty limited;
The console is already in it's 4th year in the market - software is bound to dry out.
Being so late in it's life cycle, just like any other Nintendo platform, it will see even less Nintendo games as the years go by. And like other said, Nintendo no longer can focus on 2 platforms at once. All was cool until last gen, now, things are different.

Also, the mobile market has already eaten part of it's future sales - or expected future sales.

It can technically reach 10 million

But anyway, the problem was the first half of the year. Only 3 games released that can be considered "big". But this was bound to happen right? The HH side of gaming is dying, so we shouldn't expect the 3DS to do as great as other handhelds.

Also, you guys really think a re-remodel is gonna boost sales? I guess it worked for the DSi, but now... I really doubt it will work...

I only got two new games for the 3DS this year, so I was certainly not happy with that.

It's a combination of things, like u said it was expected to be down this year, just not as much. Lack of big hitters in the first half of the year, summer drought, long overdue price cut have made the drop from last year bigger than it should have been.

Nintendo has spent up the majority of their big system sellers so they had to resort to their lesser ip such as Kirby, Yoshi, Tomodachi.

Also the delay of Smash Bros caused a drought in the summer. There was nothing significant between the release of Tomodachi in June and Smash Bros in Oct. Had Smash Bros been an August release then perhaps the summer baseline would have been better.

August marked the 3 year anniversary of the original 3DS price cut and 2 years since the launch of 3DS XL. Both sku were overdue for a price drop. 2DS-$99, 3DS-$129, XL-$149. Price cut+Smash Bros in August could have helped alot.

Ultimately Nintendo is struggling to support 2 sseperate devices at once causing droughts and after taking losses for the last 3 years, Nintendo is choosing profits over install base so price cut is out of the question.

The majority of people who want a 3DS, now own a 3DS. That's Nintendo's problem -- a shrinking market size. Nintendo has done everything right with the 3DS, as opposed to the Wii U. Their hopes lay on their consumers 'tripple-dipping' with a the 'New 3DS' -- I've already double-dipped with the 3DS and 3DS XL, I won't be buying another model.