Why is Nintendo winning the handheld war?

[Nuvendil]

Soundwave said:

Both 3DS and Vita got impacted by the smartphone tsunami. However Nintendo's "house" has a better foundation, so their house wasn't as badly damaged, whereas Vita's house got completely destroyed in the storm.

Nintendo still has the kids market, Nintendo loyalists, and the Japanese market to lean on for the 3DS, plus they had a good 1st holiday season for the machine which established an ok working base for the system going forward.

Also taking Monster Hunter away from Sony was like kicking someone in the balls when they're already down. That's the proverbial straw that broke the Vita's back. That's probably the smartest single thing Iwata has done in the last 5 years. 

You also have to account for pedigree.  Nintendo has always produced good, reliable hardware with good software output.  With Smart phones eroding the casually interested that swelled the market last gen and disposable income being limited, it was inevitable that Nintendo's reliability would win big points with those still committed to dedicated hardware.