As long as there is a dedicated handheld market, Nintendo will not lose. The one thing that has a been a constant since Game Boy is that Nintendo seems to understand the handheld market better than their competition. For example, with the original Game Boy, the big launch they promoted was Tetris. They realized that the shapes were just big enough for people to easily see while it while Tetris was also that perfect impulsive pick up and play game. Nintendo understood that you were not going to get the console experience on a portable device so they focused on experiences that you could get only on portable devices. This meant that Nintendo never had to worry about producing products that were very expensive and would lead to only a small return on their investment.
Just about every one of Nintendo's competitors from Atari to Sega to Sony all made the same exact mistakes. They all tried to capture the console experience on handheld systems. The results have led to watered down console experiences on devices that cost way too much for said experiences and offered too little in return. I would say the best non-Nintendo handheld had to be the PSP. It suffered from a lot of the same problems but stuck around long enough and had just enough Japanese support to build a decent library of exclusive games.
Then there's the marketing. Only Nintendo can seem to market a handheld device. Even when they make a mistake with something like the 3DS, they find a way to fix it before it's too late. I don't know why this is, although I do know that with Sony and the PS Vita, they were never entirely sure what it is that device was supposed to be or who they were supposed to be selling it to.
Check out my art blog: http://jon-erich-art.blogspot.com
