OnLive?

Outside of the fanbase community and within the actual market, the PSP2/NGP and 3DS are absolutely considered part of the 8th generation of videogaming. Historically, gaming's generations ARE indeed tied to their console releases, yes. But while that's the predominantly leading factor of each generation, that doesn't mean the generations START with the home consoles.

The DS is 100% officially considered part of the seventh generation. Yet it released more than a full year before any of the home consoles did. That doesn't discount its ties to the seventh gen, however. Generations don't end as soon as their successors start, after all, so why do people care so much, anyways? The 3rd gen was still fully supported by its leading manufacturer until 2002 - during the sixth generation's heyday. And said sixth generation is still living pretty well right now with the PS2. All a new generation means is that we have new hardware that is a clear succession to the old, and will serve to compete against a different set of hardware. The DS competes against the Wii, PS3, and 360. The 3DS, while it will at first, will mostly be competing against their successors.

It is most definitely an 8th generation device.

As for handheld generations, Mattel's LCD games and the Game and Watch series are the 1st generation of handhelds, which belonged to the 2nd (Atari 2600 era) and 3rd (NES) generations  of videogames (mostly the 2nd).

The Game Boy and Game Gear made up the 2nd generation, which belonged to the 4th gen of gaming (SNES-era).

Third gen consisted of the SEGA Nomad, WonderSwan, Neo Geo Pocket, Game.com (man I wanted one of those so bad back in the day, too!), and Game Boy Color. They fit under gaming's 5th gen (N64, PS1, SAT).

Handheld's fourth gen was a minor one. It had many contenders, but nothing major happened. It had the Game Boy Advance, the N-GAGEs, SwanCrystal, Neo Geo Pocket Color, and a couple others, and it fit under gaming's sixth gen.

Then came the fifth gen - which pretty much was just characterized by the NDS and PSP. There were a couple other contenders, but they were extremely mediocre in comparison. And it obviously fit under the seventh gen of consoles/gaming.

So, naturally, a handheld that drastically outmaneuvers the other handhelds altogether forms a new generation. And since that generation of handhelds was directly tied to a certain generation of gaming altogether, it fits into a new generation of gaming, too.

No , there is a reason why its called "Console Generation" , PC and Handhelds don't count, and Handhelds have their own generations.