Flagship games are crucial to franchises, so I'm sure FF13 will be spectacular -- heck, they'll probably need a special quadruple layer 100GB disc to store all the data. It's kind of like the car market, where the technical innovations in a high-end BMW, Mercedes or Lexus trickles down to the mass market. (Think of how voice acting started in consoles, and then moved to handhelds).
That said, investing in handhelds is a very smart strategy, and not just because development costs are much lower, and the potential sales base is bigger. The cellphone revolution is just getting started, and soon billions of people on this planet will have phones capable of running impressive games. Handhelds are a key bridge to the cell market. It'll take a couple of years, but it's going to happen.
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