The refurbished Nintendo 3DS contained a total of nine graphic images, which were discovered when Braydon Giles asked his brother Bryton to delete some pictures.
"He said that he didn't take these pictures, so I went over to these pictures and I [saw] two people in a bed. I told my dad and I said, 'Dad, this has porn on it', and he got up and went right to the phone," Bryton Giles told NBC's Denver affiliate KUSA.
The boys' father Mark Giles reported the incident to GameStop, who have since issued the family with a brand new device and number of games, before releasing a statement.
"GameStop is currently researching this situation," reads the statement. "We have a rigorous quality control process in place to ensure that existing content is removed from all devices before they are re-sold.
"Out of millions of transactions each year, ones like this happen very rarely. Our number one priority is to make this right for our customer."
Mark Giles accepted the store's apology, but said that the incident has traumatised his family.
"You can't unsee this. He's 5 years old. Maybe when he's 18 or 20, maybe he won't know anything about it, but he's not going to forget about this tomorrow," Giles explained.
Nintendo recently released the limited edition Pikachu-themed 3DS XL in Europe, alongside two Mario bundles.
Registering a Nintendo 3DS XL with Club Nintendo before January 15, meanwhile, will net users one of five free games.