Despite what we say, there truly is an impact of the smartphones on the handheld market. I'm sorry but I visually see it every morning on the Toronto Transit system (Canada).
That said 3DS has done well enough to warrant a next-gen handheld system without question. 3DS sales being stale in it's peak year have brought the reality of the market to light. The handheld market is sustainable, but the overall pie has decreased to be split amongst Sony & Nintendo

So... collapsed in X years? It didnt collapse from last year to this year, wich was the example you gave.

I may be on a wild thought about this, but i think the piracy on the DS and PSP might have had something to do with it. Maybe if you compare software numbers it becomes a bit better.

its the normal depression after hyperinflation

thing will get back to normal which is 100 m Hh console market. the anomaly was PSP and DS

Read the thread title we are talking gen over gen. I just threw in YoY data too, but there is still a fair YoY decline too (3DS is *not* 175k, it's probably more like 160k, we don't know the split between Vita/3DS). It indicates more that not only has this business collapsed from last gen, it has zero momenteum as games like Pokemon X/Y and cheaper 2DS models are not accelerating the traditional handheld business outside of very brief bumps, then it returns to its normal decline. 

It's not normal, it's way below the GBA at comparable points in its lifespan too. And the GBA never sniffed things like an original 3D Mario, Animal Crossing, Luigi's Mansion, etc. etc. etc. Nintendo makes far more handheld software today than back then. 

It's about 10 million ahead globally. Obviously this February does not accurately represent the trend of this generation.

Handheld sales are certainly down. But the market for handhelds is still there. Nintendo and Sony just aren't making an attractive proposition to potential customers who are satisfied by their smartphones.

a decent game compared to what?  brain age?  nintendogs? pokemon? mario kart?  look at the top software that drove DS i don't see anything on that list that couldn't be done as well (if not better) on mobile other than the mario platformers.

I think what you are failing to account for is how much lower standards are for handheld games than consoles.  moblie has always been about the easy pick-up-and-play titles.  angry birds, plants vs zombies, cut the rope, doodlejump, flappy bird, ect fits that niche very well.   there are millions of games to choose from (instead of hundreds) and they cost next to (and sometimes equal to) nothing.

so what's not to understand?

when i go to family gatherings and such the kids in my family are fighting over access to the itouches and ipads while leaving their 3DS at home and thumbing their noses at my vita.  mobile is just flat out winning on all fronts.

Well, if the Vita would pick up some slack, then maybe it wont look so scary... Nintendo can't backpack everything with the 3ds...

But I do think that dedicated handheld gaming will do just fine

More likely unless Nintendo willing to sell their games for 99 cents and intergrate their hardware into a cell phone or tablet design, many potential customers are simply not interested. Nintendo is certainly trying incredibly hard, we've never seen a Nintendo handheld get this level of software support from Nintendo directly or have so many price drops/different models/bundles/etc. 

Subjective. Decent as in one I enjoy. Mario Kart would count among that. Right now on 3DS have Fire Emblem, Professor Layton, Mario 3D Land, Bravely Default, Pokemon X/Y, Zelda: Link Between Worlds, Shin Megami Tensei IV as game I have no issue spending $40 a piece on.

I actually never rated the DS as high as the GBA or now the 3DS, it is my least favorite Nintendo handheld.

Mobile's controls are abysmal from every experience I have had.  I cannot think of a single title that can be done beter on mobile than on 3DS or PSV.

I am not arguing with you, I see the same family gatherings. It is simply a trend that I am not part of.  I would much rather spend $40-60 on a deep worthwhile well made game than nothing on a game I derive no enjoyment from.  Mobile is winning, no denying that at this stage, I just don't understand the appeal others get form them. To me it is like eating a fast food hamburger over a filet mignon. Yes, one is far more popular due to being much cheaper, but I don't get the appeal of eating crap food that gives me indigestion. 

Now, I have to sit on my front porch, play my 3DS or PSV and yell at neighborhood children to get off my lawn.