1) I really just think the market has shrunk considerably. I think a somewhat significant portion of the market is satisfied with playing games on cell phones. The DS market was filled to the brim w/ "casuals" who have no allegiance to products or companies (other than peer pressure) and once becoming aware of the ability to download cheap software similar in quality to casual DS experiences were ready to jump ship.
2) There is also the fact that there is a large stigma when it comes to teens or adults who play portable devices instead of cell phone games in which they are seen as childish (ludicrously hypocritical when you consider the games played on a portable device are many times much more "core" and mature than the casual games many typically play on their cell phones. I was once laughed at, while playing Mercenaries 3D, for playing my 3DS by a family member who then returned to playing Angry Birds). Most would liken this to the stigma against adults who play consoles, but I would argue that this is a much stronger pressure for teens and children, the primary consumers for the 3DS.
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