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"As smart phone games continue to grow, deeper and more advanced experiences are being offered. Wouldn't these directly eat away at the future handheld market?"

I thought his response to this sort of question really didn't address it well enough. He's right that there will always be those who want a deeper and more engaging experience. What he didn't say was how the handheld market will continue to evolve to give that deeper gameplay experience that the mobile market can't provide in the future.

We shall see in time.