Hi there, me again!

Although not entirely related to this subject, I’ve still got some games on my other DSi XL that I would like to transfer over to my New 3DS XL.

I’ve followed the steps outlined on Nintendo’s support website:
http://en-americas-support.nintendo.com/app/answers/detail/a_id/150/~/how-to-transfer-dsiware-to-a-nintendo-3ds-family-system

I get to step 3 but I don’t get the option “Transfer from DSi” come up on my N3DSXL.

It tells me to copy my DSi games from my Micro SD card to the system memory? At which point it tells me theres no available space left?

Do I have to copy my existing DSi games on my N3DSXL to the micro SD before I do a system transfer?

I understand that DSi games are not playable straight from the SD card and have to be on the system memory in order to play them?