Nintendo is likely to officially announce a new DS console this year, with the hardware on the market in under 15 months, according to EEDAR's Jesse Divnich.
A slowing of support from publisher partners and a desire to remain ahead of any competitors will result in new hardware, said Divnich, despite a record year for the format in 2009.
"Even though the Nintendo DS posted a record year in 2009, EEDAR expects Nintendo to make an official announcement on the DS2 within the next eight months," wrote Divnich.
"Nintendo has always had a controlling stake in the handheld market, despite facing numerous competitors, and EEDAR believes one of the biggest reasons for Nintendos success in the handheld market is their ability to remove opportunity gaps for competitors to enter. Nintendos transition from the GBA to the DS, a year earlier than anticipated, was a brilliant strategy to remove any upper hand the Sony PSP could have by being first to market."
New hardware will also help Nintendo fend off the piracy market, and entice publishers back to handheld gaming, said Divnich.
"Piracy continues to be an issue, not just for Nintendo, but for its third-party publishers as well. Whilst the release of the DSi has slowed down piracy, that slow down will only be temporary as hackers have already managed to bypass the new security systems built into the hardware."
He added: "Many publishers including Sega, Capcom, and now Ubisoft have all expressed that they may be reducing their exposure to Nintendos consoles, which will likely lead to heavy declines in both hardware and software sales for the Nintendo DS."
Earlier this week French publisher Ubisoft said that it was concentrating on the Xbox 360 and PlayStation 3 formats in 2010, following poor sales of DS software in 2009.
"The considerable contraction in the DS market during the year particularly affected Ubisoft, leading to a 160 million, or almost 50 per cent, year-on-year drop in the Companys casual segment sales," admitted CEO Yves Guillemot.