Buying smart phones and tablets don't interfere with me buying games or consoles. If anything it eats more into my PC/laptop buying. I'd say on the one hand I'm in the minority since I'm sure many people do their gaming on phones and tablets at the exclusion of console gaming. On the other, so far tablets/phones have hit the PC/Laptop market more so far.
I think its inevitable that the dedicated console/handheld gaming market will shrink, especially given the heights of the previous gen. What the new numbers will be I could not hazard to guess. Ultimately the numbers will stabilize to a new normal (will probably take more than this next gen to find out what that is). Then the numbers will begin to grow again, probably slower than in the past though.
Personally, I can't stand gaming on tablets and phones.











