The kiddie image of Nintendo really blew up after the Mortal Kombat incident. That's when Sega really won the label of the "cool" console and Nintendo was painted as the one for kids, but that's Nintendo's own fault. Luckily NOA realized how big of a blunder that was and changed course quickly. Unfortunately Nintendo is not as flexible today.
But in terms of the handheld market today, that's neither here nor there. Nintendo isn't competing against Sony or Microsoft or even Sega in the handheld market. These are the biggest handheld games in the world right now:
Not exactly COD and Madden. That's why I think the play for Nintendo is to actually go upmarket here. It's also fairly obvious looking at this where Nintendo's Wii/DS has evaporated to, people can stay in denial about that all they want though.
I think people look at Nintendo portables and say "well I can get fun, cartoony looking games on my iPhone for free, why do I need a Nintendo DS for that?".
It needs to be asked too why more people choose the fully featured larger 3DS XL over the kids-focused and cheaper 2DS and regular 3DS models.
