And that is the issue with Smartphone apps -- the R&D (development) costs have been funded by previous console and handheld sales.

When they go away, almost all remaining is freemium or junk. (A bit of a hyperbole, I admit).

As for the report, I have not read it in full, but last quarter I had some methodological questions.

Like I said it's a different means of delivering the same content.  Whereas 3DS vs Android is different content entirely.

Point taken, but the content is only different while there is an audince willing to watch it and pay for it... The audience and money spent on exclusivbe gaming content on dedicated handhelds is on the decline.

I really doubt we will see a non Android based PS Vita 2. Nintendo may keep its handheld business alive for another decade but even they are getting a lot of pressure to support the other mobile platforms.

tell me how well their tablet is doing, yea...its getting its butt kicked. It sales are just terrible and they are having to reduce the price incredibly, and it still isnt working. Their phones have such a small market share even when microsoft tries to spin it. Microsoft has no chance in the market right now, they will never come close to IOS or Android

but not all apps in the google play store/IOS store are games.... there argument is now invalid

Tablets are doing better than Android tablets did in the first 2 quarters of availability

http://blogs.computerworld.com/tablets/22600/windows-8-tablet-sales-show-real-life-windows-rt-tablets-hit-rock-bottom

Also Windows phone is doing a lot better than people realize. Nearing 4% marketshare worldwide and being the fastest growth platform

http://www.macrumors.com/2013/08/07/android-dominates-nearly-80-of-smartphone-market-ios-drops-to-13-share/

http://www.wpcentral.com/windows-phone-second-most-popular-mobile-platform-latin-america

http://news.cnet.com/8301-1035_3-57576738-94/windows-phone-outships-iphone-in-some-countries/

The desktop and laptop marketshare is on the rise and pretty much unchallenged on the mid to high end.

The days of Microsoft OS dominence is over but you have to look no further than their financials to see both windows phone and windows divisions are profitable. Google for all their marketshare and dominance with android still depends on ads like a hooker depends on crack to make money.

Handhelds will continue to decline, so many kids these days are being brought up with a tablet as their go to portable entertainment device these days, not the Game Boy/DS/PSP any more.

There is no one on this earth that could actually say the surface is succesful, it is not. It is a failure right now, it made their profits go down and

http://money.cnn.com/2013/07/18/technology/microsoft-earnings/index.html

http://news.investors.com/technology-click/073113-665855-microsoft-discloses-surface-tablet-sales.htm

And Being the Fastest growing platform means crap, I could sell 1 card tommorow, and sell 5 the next day and say "IM THE FASTEST GROWING CARD MAKER!!" Its going to to take microsoft a long long long ass time to be able to compete with those markets of android and IOS, if they ever do at all.

Now i will say this, i like their phones, and i do think there could be a market for them, but i just dont see a market for them in tablets. they are just bad at making tablets.

Is the money spent on gaming declining?  I honestly don't know.  Obviously the Vita is a sharp decline from the PSP but I don't know where the 3DS stands in terms of hardware or software.  We only saw a two quarter thing on that chart, but I'm not sure how that's broken down.  I assume its calander year not fiscal.  If so, Q1 tends to be stronger for handhelds console wise.  Big holiday titles are still selling, and the hardware itself has an aftereffect from holiday money and gift cards being spend.  Q3 should be bigger than Q2 was, and I wouldn't be at all surprised if dedicated handhelds are ahead of Google Play.

There is also the question of revenue vs profits.  Money is being spent but how much of it is profit and how much is just revenue?  Natrally if the profit margin is lower on the Google Play store, then these numbers are a bit misleading.  There is also an issue of how the money distributed and how much profit each individual game makes.  We've heard from several indie publishers that they've made more money on the 3DS, or XBLA, or sometimes even the Vita, then they have off of mobile development because it's easier to get noticed on those markets.  If there are 500 games making 500 dollars, than that is way different from 50 games making ten dollars.

Overall, the data that people are using to make these judgments are vastly incomplete.  We talk about marketshare, which isn't always a useful thing.  Whenever you have an influx of new consumers, that's going to rapidly change marketshare.  In the Nintendo DS generation, Nintendo went from having a practically 100% market share to something like 66% in terms of hardware sales because of the PSP.  So, that would indicate a big loss for Nintendo, which wasn't exactly the case with the DS.  

To sum it up, I need more convincing figures.  The joke that is the media has taken one quarter of decline and made it out to be the death of portable gaming, but that is an incredibly incomplete view of the market.  I'd have to see a lot more data to declare the death of handhelds.  It wasn't too long ago that Facebook games were the future of gaming.  Ask Zynga how that went.

Many apps are free on Google Play but have a fee on iOS. Doesn't that mess with the stats?