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Mummelmann said:

Mobile gaming was still not a big deal in the DS' prime, the whole scene was still very new and undeveloped. Even discounting the Vita; the 3DS is struggling to maintain a 50% sales rate compared to the DS, the toll the mobile industry is taking is massive, and since handhelds are competing more directly overall on convenience factor, they get the smackdown the worst.

I don't think Nintendo will release a tradtional, dedicated handheld, something not entirely unlike a smartphone or tablet is more likely. If they do release a traditional handheld; they're showing that they are no longer fit to be in the modern gaming industry as a hardware manufacturer, they have made so many mistakes now and have been dead-set on not learning and refusing to break tradition. They have to break tradition and start learning, even if the company itself can stand to post losses for a decade; the investors simply won't put up with that (and I honestly don't understand why more people can't see that).

The gaming market grew and grew and then the mobile scene, browser model and social games exploded and took a lot of the surplus that had been built by the more traditional devices; mostly the consumers with a more fleeting interest (the guy who turned on his PS2 once every week, the young couple who only played Singstar at parties or Buzz on weekends, the same crowd that bought Kinect and Eyetoy etc), they headed for the higher perceived value and the new focus of the fledgling gaming market segment: convenience.

The more shallow consumers bought more traditional devices before simply due to the fact that if you wanted to play any kind of games, it was either consoles or PC (PC was "too complicated" and never tried to cater to the "party" gamer in the way consoles did), these people also found it nifty that the machines doubled as media devices to watch DVD's (and later Blu-ray) on, and in the 7th gen both the PS3 and 360 became popular choices for streaming. Almost the entire market for these services, the simple games and the less deep reaching side of traditional devices, have been usurped by the convenience segment.

The mobile market was not as big as it is now, yes. But, in 2008/2009, it really started growing, and the DS was still selling well then. There are people who can't be completely sustained with just mobile games, actually quite a few. There's still a market for traditional Handheld gaming. When Nintendo's Handheld starts to go below 60/65 Million each generation, then I'll agree that the traditional market is done.

Also, what do you have to say about the GBA~3DS estimates? 80 Million is not bad, the PSP did that and it was still a large success.