Was going to make these threads a few days ago, but I was too lazy.    Anyway, here's my general predictions for what will happen with all consoles, including handhelds.  This thread is for...

Handhelds

I'll start with the handheld market, as it has already officially begun with the release of the 3DS.  3DS sales already seem to be dropping quite a bit since its release, with it being beat by the PSP for several weeks in Japan and this week in EMEAA.  Nintendo also failed to meet its shipped projection of 4 mil 3DS units for the end of March, missing it by ~ 400K.  I think the problem is 50% due to people's perception of the 3DS being merely a 3D version of the DS, 25% due to the price, and the remaining 25% due to lack of appealing SW.  If sales continue like this Nintendo may consider dropping the price before the holiday season, though I think they will probably want at least a whole year at the $249 price point.  Having said that, I definitely don't think the 3DS will end up being a failure, but I also don't see it selling near what the DS has sold, as well as it seeing heavier competition from Sony with...

The NGP.  I think Sony is going to claim closer to 50% marketshare this time around.  With what seems a great line-up so far, the NGP may have the library/3rd party support to pull off that ~50%.  The dual analog sticks, in combination of the touchscreen/touchpad, should provide for some interesting control layout options and gameplay.  Then you have Japan's recent switch to supporting the PSP of late, which should continue into next gen for the release of the NGP.  And having a COD game definitely won't hurt it in Americas.  Of course, all this depends on 2 important things, price and launch line-up.  I truly believe Sony wouldn't even attempt selling the WiFi only model for more than $299, though if they really want to hurt the 3DS, they should try to price for the same $249.  I think either price will seem acceptable to majority of potential buyers, while anything higher would be near suicide for the NGP.  Another thing Sony needs to do to help the chances of the NGP succeeding is to release at least 2 or 3 must have games at launch, or very close to it.  Those 2 things, coupled with a holiday release, should see a nice start for the NGP.

So if Sony can get the price point and games right for the NGP, I think that it and the 3DS will have a constant fight over the lead for handheld market.  They will exchange leadership of the market probably yearly as either one gets better games and/or price cuts, but neither will truly dominate the market.

Any thoughts?

Edit (Added from new post):  Decided to give life to this old thread, especially since Sony just announced the NGP/Vita price.  $249!!  The exact same price as the 3DS.  I'm going to have to change my prediction a little. 

It seems Sony has bested my price prediction.  With the Vita's price point + great 3rd party support + the 3DS not so stellar sales of late, I think Sony can get more of the market than my original prediction of ~50% (I was mainly thinking somewhere around the ballpark of 40%-48%).  Now, I'm feeling pretty confident that Sony, if they continue with their Vita support, can actually be the first company to best Nintendo in the handheld market, claiming 60%-70% marketshare.  What do you guys think?

I think you're forgetting the massive rise in smart-phone/tablet video game market as well as the perpetual rise in internet/flash based games. The market is much broader than two handhelds from Sony and Nintendo respectively, Sony is even competing with themselves with their Playstation store for Android.

I say iOS and Android win the war.

Don't you know, they don't count. The games aren't true experiences, plus many of them are free. Free games don't count either.

They changed the rules. Smartphones are the new Elephant in the Room that everyone chooses to ignore.

To be honest, I HIGHLY doubt either market is going to incredibly hurt the other.  They will coexist like digital distribution and physical formats.  People game on those devices out of convenience and availability.  But the fact remains, that main reason people get those phones is to call and text people.  It would be like saying that as smartphone get more apps to be more like PCs/laptops, people will stop buying them, which is completely ridiculous.  Another fact is that even before the DS was released, gaming on phones was growing, yet the DS has become Nintendo's best selling console.  The PSP has even become a success, which may go on to sell on par with the GBA, even in a market that also houses the HUGELY successful DS system. 

And on the console side, it doesn't seem like those things, or OnLive for that matter, are hurting that market, either.

I don't consider Android/iOS to be true consoles, and definitely not true competitors. I have never walked into a store and looked at the 3DS and said "Nah, I already have a smartphone." I can't imagine anyone putting $250 on their desk and saying "Hm, should I use this to buy a 3DS or a smartphone?" If you bought a smartphone, chances are the 3DS wasn't going to change your mind. If you have a 3DS, chances are you'll be getting a smartphone in the future, irregardless of your purchase.

Smartphones just don't have the inputs required for video gaming. It's definitely great on a bus or before class, but that's about as long as Angry Bird is going to hold my interest. And belive me, there's a huge difference between Angry Birds and Uncharted.

As far as how I feel about the NGP, I think a $250-$300 price point will make it extremely attractive. People need to realize that not only does the NGP have outstanding controls, it also uses the internet. If Sony can nail a full functioning browser and couple it with their supposedly sensitive multitouch screen, the NGP becomes a 5" tablet. Now we have a device that not only plays deliciously beautiful graphics, but will do everything a Samsung Galaxy Tab and iPad can do with a significantly more powerful processing unit and a smaller form factor (though this may or may not be a good thing depending on what you're doing).  Considering the fact that the Galaxy Tab is $350 and the iPad is a whooping $500, $250 would be a steal for the NGP.

If you don't mind me asking, why are touch controls on a phone not good enough for gaming but a stylus and touch screen is fine for :

The World Ends with You, Touch Detective, Phoenix Wright, Brain Age, Nintendogs, Final Fantasy III, Ninja Gaiden:Dragon Sword, Zelda: Phantom Hourglass, Zelda: Spirit Tracks, Ninja Town, EVERY Professor Layton title, FF Tactics, Star Wars: Clone Wars, Kirby Canvas Curse, Advance Wars, Meteos, Touch of the Dead, Harvest Moon: Island of Happiness, Animal Crossing, Puzzle Quest, Mario Hoops 3 vs 3, Trauma Center, Cooking Mama, Picross, Raving Rabbids, Super Monkey Ball, Luminous Arc, Hotel Dusk, Mario vs Donkey Kong 2, Wario Ware Touched, Scribblenauts, Sonic Chronicles, Dragon Quest IX and My Sims?

Oh yeah, then there is this.

I think NGP will beatout the 3DS in the handheld market since it has alot more features and power than the 3DS. And the general public looks at the 3DS as a DS with 3D which unfortunally is not true.    :) 

i think the NGP will eventually get a revision to be more like that. in other words it will be a phone

3DS will win, even if Nintendo have to stop manufacturing DS's, and lower the price of the 3DS drastically.