Yeah, that are 3 good games in a vast ocean of crappy shovelware.

I just listed a few notable DS/PSP ports. If you say there are 3 good games on mobile, then you really have never bothered with the market, and are making the same erroneous statements that fanboys use against consoles in which they believe no good games exist.

Is there are a lot of crap shovelware due to the nature of non-restrictive app markets? Absolutely. But there are litterally hundreds of fantastic games on mobile that I would take at parity with most DS games. Additionally, you are starting to see shifting of development from handhelds then mobiles to parity with both, which is very telling for what publishers think of the market. Additionally, the sales data is so compelling, that publishers will have no choice to continue pushing their content onto mobiles. Titles like FIFA have sold multiples better on mobile than both handhelds combined.

No Buttons no Interest from me. I have Iphone/Ipad gaming just sucks with those two.

I agree. i think its a huge transitional period for the gaming industry now.

The mobile apps have made it wasier for smaller companies to come up with new games, where as before, you had to be a huge company like nintendo or sega to have any chance at releasing a game and making it reach the masses (excluding games released on PC etc but that was for the tech savvy)

Now, anyone can download games and play them at a push of a download button.that will make a hell of a difference in the market.

Why do you tell people to look at the raw numbers, then say to ignore them when they don't support your position?

Going by the numbers in the OP, DS software revenue has dropped from $1.842 billion in 2009 to $1.341 billion in 2010 to $1.179 billion in 2011.  If we look at worldwide DS software shipments for the first three quarters of the year, they have dropped from 104.68 million in 2009 to 85.06 million in 2010 to 50.98 million in 2011.  The 3DS has contributed 17.56 million this year.  This is down from a peak of 123.76 million in the first three quarters of 2008.

You seem to be making some big assumptions based on a single survey on playtime while ignoring the drops in hardware and software sales.  I don't think dedicated handheld gaming will die, but I really can't see it coming close to the last generation.  Actually this made me realize something.  The only games I saw kids playing at thanksgiving this year were on their parents smartphones.  Nintendo and Sony are going to have a harder time breaking in when the first games a lot of kids will play will be on smartphones.

I guess it is time that Sony launches smart-phones under the PSP category. It would be damn awesome to have such an awesome hand held gaming console along with some cellphone features.

they did and it failed miserably 

The DS in 2008 was the best year for any console period, and I don't expect the 3DS to beat it at all this year. In fact, I expect to sell 15 to 20 million a year after this, like the GBA. Not all systems are the best selling system of all time. and to expect that it would be insane

Market expansion at its finest.

That may be the way to look at one console, but not the market.

In a market with only two handhelds - from Sony and Nintendo - hardware sales SHOULD break records with each successive release. Otherwise, the market is contracting or stagnant. Last gen for handhelds saw upwards of 200 million consoles sold. If 5 years from now we see both consoles ploddering through 100 million, then it should be obvious that the market contracted.

From there, we have to ask why the market contracted and look at possible options. The two answers would be that consumers are no longer interested in handheld gaming, or something stole their market share. I think at that point, we would know definitively which one of the two is the answer.

If you look at what has happened in the opening phases of next-gen handhelds, they've been an abysmal failure. The 3DS was killed at market forcing a huge price drop by Nintendo. It is selling better now, but still not earth-shattering numbers. This is a very telling scenario regarding consumer interest in next-gen handhelds.

Right now, to me, it is as I predicted well over a year ago: mobiles are swallowing up traditional handheld market share. This will continue to play out as both Nintendo and Sony fail to meet hardware expectations. As this continues, developers will pull support further and further to the mobile side until few titles are pushed outside of regional fare and 1st party IPs. Again, this is because mobile gaming has a user base that is far in excess of handhelds. There are more copies of Angry Birds out there generating revenue than there are DS, 3DS and PSP consoles in existence. That should tell you where consumers are placing interest.