When it comes to predictions like this, from what I have seen the vast majority of analysts are wrong almost all of the time ...
In the 1990s, as PCs were becomming common in most people's households and PC gaming was experiencing rapid growth because of this people were predicting the "death" of console gaming; over the timeframe of predicted death of consoles, the console gaming industry grew rapidly and, at the beginning of the 2000s, people started predicting the death of PC gaming. PC gaming didn't die though, casual and flash based games grew rapidly, MMO games became much more important and profitable, and the PC became another platform many/most games were ported to.
In my opinion, you will see phone based games continue to be the 5 minute time-killers they currently are that people play when they have nothing better to do; and handheld systems will grow into being more "complete" game experiences for people on the go.
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