Yes, it does. When you transfer, your new 3DS is essentially the old one. Just make sure you copy all the data on your SD card to a computer first if you want to use the larger one that comes with the XL or 2DS (then copy the data from your computer to the new SD card). I didn't do that and I lost all my Swapnotes and had to redownload all the Ambassador Games. Not a huge deal, but it was mildly annoying.