Damn i really thought handhelds would have there days counted but 3DS is a beast and i think Nintendo will stay on the Handheld business by quite some time but it will compete alone there, well it will compete agaisnt SmartPhone but lets be realistic here:

. 3DS is a BEAST and it dominates Japan.

3DS is going to end its second year down YoY despite not being on the market a full year in 2011. the dedicated handheld market is still alive but it is far from amazing which is especially true when you look anywhere that isn't japan.

the days for dedicated handhelds are numbered.

When they drop the 3D and increase battery life, you'll start to see that the handheld market isn't going anywhere.

Sales are okay. Games, not so much. I've been a bit let down by 3DS retail in 2012. When the real 3DS games start hitting (Pokemon, a 3DS specific Zelda, Animal Crossing, etc), we'll see it do even better.

3DS will possibly be down YOY but didn't the 3DS have some sort of record setting first year? Yeah, it's an excuse and an example of side-stepping but it may be something to take into consideration. I don't know.

Sales are good, but are a far cry from their heyday. I believe that the 7th generation was a temporary golden age for handheld games, and that things will be more like the Game Boy eras from now on. The 3DS has a place in the market, but a smaller one than the DS did in 2006.

No it´s not.

3DS dominates Japan because Nintendo dominates Japan.

The smartphones, tablets etc. excuse, that people so like to use nowadays, though have it's place in the market and a huge one, is overused. Japan is as much if not more geeky about portable tech as the West, and yet 3DS is underperforming over there. Though I doubt this scale of domination possible for Nintendo outside it's homeland simply because of severe competiton, but it could perform better. The problem is not 3DS or handhelds in general, but Nintendo brand by itself.

It's going to be the weakest handheld year since the 2005.

2005: 20.6 million (DS 10.6 million, PsP 9 million). Likely to be a bit higher due to the GBA still selling a bit.

2006: 30 million (DS 20.5 million, PsP 9.5 million)

2007: 42 million (DS 29.5 million, PsP 12.8 million)

2008: 44 million (DS 29.5 million, PsP 13 million)

2009: 37 million (DS 27 million, PsP 9 million)

2010: 30 million (DS 21 million, PsP 9 million)

2011: 30 million (3DS 13.25 million, DS 9 million, PsP 7 million, Vita 0.5 million)

2012: 20 million (3DS 11 million, DS 3 million, PsP 3 million, Vita 3 million). Plus whatever they sell the next few weeks.

In other words, the handheld market is the weakest it has been since the DS launched. Considering 2005 lacks GBA sales, it's likely 2005 was actually higher than 2012.

However, the reason for the drop isn't necessarily smartphones. The total revenue for smartphone games is at just 2 billion dollars a year, while the handheld market is still well above 10 billion.

It's less that the smartphones have stolen the market, and more that the 3DS simply doesn't have the appeal of the DS, and the Vita is nowhere near the appeal of the PsP.

The decrease is due to internal problems, rather than external. Which means there's still plenty of time to turn it around.

The handheld market stayed alive by cannibalizing itself. 3DS ate into Sony's marketshare, in large part due to Monster Hunter, yet it's still selling about as well as the DS did, while the Vita is bombing. Imagine how the DS would have sold if it had Monster Hunter.