The handheld market has shrunk, but is far from dead.
Gamers are always going to want total control of their handheld games. The cellphone/ Tablet market will continue to garner the casual gamer, but heavy hardcore gamers will always choose a game with physical controls over touchscreen.
With Sony introducing Cross Buy & Remote play into the handheld scheme, Its the perfect shoe in for gamers to continue to purchase handhelds.
And if you think handheld gaming is all but dead, just take a look at those PSN Vita digital downloads..........