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RolStoppable said:
Carl2291 said:

I think that smartphones are the next logical step for Nintendo profits while the market for traditional handheld gaming shrinks.

Traditional handheld gaming is shrinking to its ultimate death by virtue of what Switch is. Or better said, your use of the word 'traditional' complicates the discussion in an unnecessary manner. I guess it's for the best if I split my response to account for either scenario.

1. You don't consider Switch traditional handheld gaming - In that case, traditional handheld gaming is on its way out as Nintendo will have only Switch which takes on a new form of handheld gaming that in reality doesn't differ much, if at all, from traditional handheld gaming.

2. You consider Switch as continuation of handheld gaming - In that case, handheld gaming isn't shrinking anymore. Switch is roughly keeping pace with the 3DS in a launch-aligned comparison, all the while Switch is 30,000 yen and has no problems selling while the 3DS struggled at 25,000 yen and needed a cut to 15,000 yen. In other words, Switch sells like the 3DS at twice the price. That signals a healthy market, not one that is in trouble.

Regardless of whether you pick scenario 1 or 2, smartphones aren't the next logical step for Nintendo profits because Switch will comfortably replace what the 3DS accomplished and add so much more to the bottom line.

You also have to factor in that the Switch would be doing even better if not supply constrained so your argument to Carl is even stronger then you made it sound.  

 

I think a hybrid console + mobile games is Nintendo's best bet.