I think that if handhelds survive, they'll become somewhat of a "niche" market - they are already that, with the exception of Pokemon.

In the past, handhelds served the purpose of "close-enough" gaming experience: you want to play something, you're not home, you turn on you GameBoy and have fun.

But now, portable consoles are quite expensive, have a ridiculous battery life, are too big to fit comfortably on a pocket... smartphones are a much better option for this "almost-a-videogame" experience.

People who still buy and enjoy handhelds are mostly people who really like video games, like you and me. We buy a 3DS because it's the only place we can play Bravely Default, and a Vita so that we can play Gravity Rush. No more casuals (dat Nintendogs and Brain Age sales, for example). Maybe the market can sustain itself based only on this public. Sony seems pretty satisfied with the current niche condition of the Vita at least.

So sad to see Nintendo being a former shell of themselves as I am a fan of Nintendo handhelds and I own a 3DS too. 

These statements indeed especially the last one ... 

Obviously nobody wants to buy their overpriced and outdated hardware. And DLC to pay money in order to make Mario jump higher won't make this any better. A radical change in overall strategy and a new President will be required asap.

The dedicated Handheld market is in big decline.. it's clear..
To espect the same level as last gen would be pretty insane. if 3ds endsup with half of last gen, it would still witness that Nintendo brand is going very strong.. imo

It would be more fair to see/judge "succes" by marketshare.. (against vita)

I agree completely. If there's any credence to the Nintendo Fusion then Nintendo sees the future of dedicated handheld devices as being a niche market as well.

It is pretty interesting that Nintendo's handheld decline lines up almost perfectly with the opening of the iOS app store and the release of Angry Birds in late 2009 as the first real mobile app gaming "blockbuster".

Damn, 2008 and 2009 were God tier! The decline for the 3DS is worrying even though the console is already a success. I may think the 3DS from a hardware standpoint is a steaming pile of shit but I'd hate to see Nintendo's handheld's division just disappear. The games they make for their portables are always ace and I'd say outclass their home console games by a wide margin.

I'd hate to see Pokemon go to smart phones but Vita on the other hand.... A Sony designed hardheld with Nintendo games on it would be GOAT.

With that said Nintendo isn't going anywhere but they need to wise up big time and make hardware that's not only good for them but also for 3rd parties. Just look at the Vita. It's sales are just as bad as the Wii U but it's actually getting games release for it.

2014 (FY 2015) will be probably even lower too I guess. I wonder what Nintendo can do to stop/slow this erosion of the handheld business.

Holy cow. That graph is ridiculous. Is there any question of the leadership problem at nintendo?

There's no denying that the 3DS' quick remedy is hurting it in the long run. The 3DS' problems are only going to rear it's ugly head more and more unless Nintendo can think up something quick. A one-two punch would be very useful. The 3DS still has some life left in it, and Nintendo can use that to their advantage. But, will they?

The Wii U still can grow, however. Nintendo has a great line-up coming that should surely help. Although, the Wii U's best selling year will absolutely never reach upwards of 10 Million. Probably not even upwards of 5.5 Million. The growth will be marginal.