Expecting the handheld market to grow under such tough circumstances would be lunacy. It's a transitional period, and obviously smartphones and tablets have changed the market radically. That doesn't mean there's no place for traditional handhelds, but the days of 200 million plus traditional devices being bought in a single generation could be over.
Vita's failure to do well this year has clearly hit the traditional handheld market hard, and Nintendo's inability to replicate 3DS's Japanese success in the West is another hugely important factor. Vita needs software and a price cut, and Nintendo need to bring out big games on a more consistent basis in the West if the handheld market is to begin growing again. They also need to take a damn good look at their digital policy. It's certainly improving, but mass market awareness of eShop and what you can get from eShop just doesn't exist. Pricing across retail and digital needs to be more flexible and needs to take into account the race-to-the-bottom pricing we've seen on app stores. That's not say Nintendo need to race to the bottom, but they do need to acknowledge that the market has changed and that a more flexible approach to pricing will help to push greater volumes of software, and in turn, make the hardware a more appealing proposition.
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