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RolStoppable said:

Instead of percentages, you should look at raw numbers. There's a good reason why percentages are used and that's because a certain agenda needs to be supported.

If you look at raw numbers, you will find that mobile gaming hasn't really cut into Nintendo's market at all. The DS declines in software revenue are perfectly normal for a platform that is beyond its peak (the same goes for the PSP, by the way). What you are actually seeing here is a market growing independently from handheld gaming, but certain folks don't want to see it this way and rather push the idiocy that mobile gaming is killing handheld gaming.

Up until this point these people have failed to show the necessary data to support their point and a survey conducted in March 2011 showed that handheld gaming experienced the largest growth in terms of playtime, out of all possible devices that play games. So the reality is the opposite of what these people want to see. Nintendo isn't losing marketshare to iOS and Android, because these things aren't even in the same market. It's a separate market just like PCs and home consoles.

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.