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Soundwave said:

The smartphone era has just obliertated whatever market there was for game handhelds here I think. Nintendo is throwing everything they can at the 3DS just to keep it treading water ($80 price cut, ambassador games, Mario Kart, SM3DL, NSMB2, some OK third party stuff (Resi Evil), XL redesign, bundles, different colors, etc. etc.).  

I don't think "treading water" accurately describes the success of the 3DS. It's doing pretty well.

3 of my friends own a 3DS, and another is planning on getting the XL. One of my friends owns a Vita, and at least two or three others have expressed an interest in owning one, if it was less expensive and had more games. We are all over 20, and in spite of the fact that most of us own iOS devices, we have very little interest in iOS games. I think the market is still here, the Vita just hasn't managed to appeal to it enough yet.