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The dedicated handheld market is merely being reduced to the core gamer. Nintendo will continue to find success with their first party titles, whilst sony will turn the vita into a streaming+indie box.

Japan is still in 2008, so both systems will succeed there. I can see one more handheld console from both nintendo and sony, With the speed at which mobile power is increasing, both could release wii U spec-ed systems in 2017 and sell them for dirt cheap ($179). Nintendo will continue to produce a limited amount of dedicated content, sony will just make it a PS3/PS4/PS5 streaming device.