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Squilliam said:

Nintendo is a gaming company as many companies previously were typewriter companies. If Nintendo is defining itself by the games then it is vulnerable to companies which don't call themselves game companies coming into the market.

This is not an accurate analogy.  Typewriters are not used anymore, thus companies like Royal and Underwood went under due to them not succesfully evolving into keyboards or merging with PCs, for example.  Nintendo's games aren't going anywhere.  Will their handhelds eventually become a bit different to adjust to the times?  Maybe.  But even more than EA or Activision, Nintendo's software will always be in high demand, barring some kind of complete meltdown in their creative department, which isn't likely. 

@noname2200 said it best:  PCs have not hurt consoles in the least, and that's even with the former having many huge advantages over the latter.  True that with handhelds it's more about the convenience of having everything on a single device, but a $0.99 game on iphone is still a far cry from the latest SMB, Mario Kart, or Zelda as far as quality.  It's not like the way the convenience of MP3s have hurt CDs, simply because that's the exact same content at a slightly lesser quality, as opposed to completlely different content altogether.

Apple has proven that there is certainly room for their business model in the market, even with Nintendo around, but the opposite is also true, especially where younger gamers are concerned.  And remember, Nintendo has billions and billions in the bank.  What's to stop them from establishing a full blown online business model for thier own games in ten years, or at the very least, even partnering with a phone company?