As much as I'm convinced that smart-phones will be around for a long time, I'm not convinced that gaming on smart phones will advance much past flash games replacements for quite some time ...
At the moment a 3DS or PS-Vita game will generate about 10 to 20 times as much revenue per unit sold as the typical pay to play smartphone game, and the pay to play smartphone game will generate about 10 to 20 times as much revenue per unit as the typical ad-supported game. This means to generate the same revenue as a 3DS game that sells 100,000 units you would need to have 1 to 2 Million people pay for it on smart phones, or 10 to 40 Million people play an ad supported version of it. This level of revenue is by no means all that high, and I'm willing to bet that the 3DS in its short life already has more games that have passed this level than smartphones have in the past 5 years.
While I believe that the growth of smartphones in the developing world will eventually lead to smart-phones being able to support a large number of Nintendo DS or PSP quality games based on current buisness models, unless you see a dramatic shift in the business models of app developers there will be a huge market for higher-end content for both the 3DS and PS-Vita (and their successors).
