:)

after beating Nintendo in the home console market they figured that they should go after their handhelds. but, instead of beating them in the handheld market, Nintendo's home console took back the spot as the king while the PSP sold half of what the DS did, oh the irony XD

Quantity sold doesn't relate to profit.  As you have pointed out, both the PS3 and 360 have lost money for their respective companies.  Both Sony and M$ have other interests outside of gaming that they get benefits from this.  Otherwise they would have left the business.  A lot of people complain about how weak or technilogically behind the Nintendo systems are, but they are generally profitable from day one.  Nintendo doesn't have other businesses to support or be supported by.

the 2ds is not a response to the psvita price cut because 3ds already destroy psvita sale

I think the Nintendo 2DS is more like a response to Google and Apple more than anything. I don't know if vgchartz still has that chart that compares a console's performance over time relative to consoles of previous generations. But I am fairly confident that 3DS is selling at a far slower pace than DS in North America and to a lesser extent Japan. Lots of Japanese developers and gamers have shifted over to Android and iPhone. Some of them exclusively. Because the barriers to entry cost for making a 3DS or PS Vita game is significantly higher while putting a game on Google Play or even Apple App Store is more convenient. 

I'm not sure if Sony ever thought they could beat Nintento in the handheld market or if their intention was to just steal some market share. If the objective is to make money, you don't have to be #1 to do so. If the market is lucrative, there's money to make whether you're #1 or #2 or #5.

That's definitely a factor of course. Nintendo probably found out through focus group research and/or surveys that parents feel that the Nintendo 3DS is too expensive. And maybe parents are not too keen on their kids playing in 3D on a regular basis for safety/health reasons (watching a 2-hour 3D movie once a month in theatres for eg. is not the same as playing 3D video games almost every day). These concerns with the 3DS are likely to push a parent towards buying an iPod Touch or cheap/mid-tier tablet for their kid instead (even if these devices aren't cheap either, it does more than play games and it's more portable than a bulky 3DS). The strategy of Nintendo 2DS + Pokemon (killer app) is to sway parents back to the Nintendo fold.

When I first heard about the Nintendo 2DS rumours, my immediate reaction was that Nintendo was "backtracking" and having regrets/second thoughts about going the 3D route.  Sean Malstrom is probably throwing a party on his blog right now. And my second reaction was "how are you supposed to fit that in your pocket?" The 2DS looks like a tablet. Historically, portable gaming consoles have been pocketable. So the loss of pocketability for a portable gaming console is a step backwards IMO.

Male teens/adults are a lost cause for console handheld gaming no matter what because most guys carry a wallet and keys in one pocket and their cell phone in their other pocket. Our jeans have more than 2 pockets. But if we put anything else in our pockets, it's going to get to the point of being ridiculous. In terms of being weighed down and feeling uncomfortable. And you can't bring your jacket with you in the summer (it's bad enough that I don't have a place to put my glasses when I don't have a jacket with me. I don't like wearing my glasses all the time). The man-purse isn't in. Women have purses so it's not a big deal for them to carry a 3DS/2DS or a tablet. But I still think they'd prefer to carry a 3DS over a 2DS and an iPad Mini over an iPad in their purse.

For those of us who still play with a handheld gaming console and are of the male persuasion, how many of you guys actually play with your handheld console outside the home? I rarely get the opportunity anymore. Only when I have a bag with me. And the man-purse isn't in. So on the go, I mostly play games on my smartphone if I'm taking the subway or streetcar (basically a tram or a poor man's LRT) and not driving. And even then I don't game on my smartphone that often because I live in the suburbs so I only ever get the opportunity to take the subway or streetcar when I'm in the city. That's another thing too: most adults in North America drive to get around. So it's hard for handheld gaming to take off with our age group.

2DS is the first step in open acknowledging the stereoscopic 3D isn't the "big thing" they wanted. They also need a way of boosting the processing power of the console, this would effectively double what they have to play with for visuals.

I expect this to open the door for games not using stereoscopic 3D and thus being able to push more polygons and effects around the screen at once.

I wonder if hardware limitations are the reason the King of Fighters spiritual successor was axed on 3DS and moved to Vita and also the absence of the new Level 5 game from 3DS when it's on practically everything else.

I play away from home at least as much as I play inside it. I can fit my 3DS and my cell phone in one pocket. It's only uncomfortable while sitting, so I put the 3DS in the cup holders while I'm driving, which is fine by me because I usually charge it in the car anyway.

At home I pretty much only play late at night. That's the only time I can find to play video games in general at home.

I think they saw how slowly Nintendo was going with increasing technology as well as the growing threat/fad that was the iPod and figured the PSP would be a way to hit two birds with one stone. It would give them a multimedia device to market against the likes of Apple and a handheld device to wound the previously unchallenged Nintendo. It started fairly strong but the games didn't have enough steam outside of Japan and the multimedia aspects of it were soon over shadowed by the smartphones.

Vita is their attempt to try again, now that they see digital purchases are going to be the future, the benefits of remote play via cloud and other aspects, they wanted to try to turn the strong finish the PSP had in Japan into something greater but so far outside of a few Japanese developers still have yet to do much besides make Vita a potentially less successful PSP2. The push of the digital indie software and the cross/remote play features with the PS3 and PS4 are probably the last real surge Sony will give the system before writing it off as a failure.