Yeah... but a few problems.
First, how much does one of those phones cost? I would guess around 500 dollars/euros, if not more.
Second, from those that buy it, how many buy games on it?
Third, a game like that would involve high development costs. Do you think they can sell it for 5 dollars/euros or something?
Conclusion: No, things are not that simple. Phones work with low budget mindless games. A cinematic experience from the likes you have on dedicated handhelds? It will hit the exact same walls the handheld consoles do.
I think the doom is not for the dedicated handhelds, but the whole handheld market. The choke point will make it impossible to deliver better experiences due to financial constraints and clashing business models.
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