I've been thinking of what Nintendo could do about this situation and I proposed a similar model to the iOS devices, where we have a phone and a non-phone version of the same portable console. Please direct all comments, constructive criticisms or on my idea to this thread http://gamrconnect.vgchartz.com/thread.php?id=195671
@OP, I put a link to your thread in the OP of mine, since some of the things you said pushed me to finally make a thread on this idea I've had in my head for a while. I doubt that merely revamping the eShop would make a big difference because not many kids nowadays even know what a 3DS is. Before they get old enough to want a 3DS, they start playing games and using educational apps on their parent's tablets. From around age 2. By age 5 or 6, the tablet satisfies their gaming needs. It'll take much more to convince a parent to get a portable dedicated gaming machine, or to get a kid interested enough that he begs his parents for it.

Hard to believe a real old-school Nintendo fan would like the Wii & dislike the N64 IMO.

I dont think portable gaming is dead, its just that whoever makes the next one has got to offer serious value for money. Mobile gaming, despite the general consensus that 99% of the games are garbage, is continually on the rise because of the lure of gaming for a few pounds a pop.

The Vita would have fared better if it offered backwards compatibility with the PS2 for instance (I know its not possible for a handheld to emulate the hardware, but would it have been impossible to incorporate hardware to run games natively?)

If Nintendo release another handheld, would it be 3D? If not, then that pretty much ruins backwards compatibility for 3DS titles (or hampers them somewhat.)

They should release a handheld which gives gamers a lot more of what they want at prices that compete with mobile device. Instant access to all 8 bit and 16 bit Nintendo systems for a start with games being priced for the old systems competitively. A full collection of N64 titles as well. How about one up from that, Gamecube compatibility. They aren't huge in file size so space shouldnt be a problem. Imagine having a Nintendo store full of GC games to play on the go?

All this extra stuff in addition to new games being made on the console would be brilliant. I just dont think that one or two games a month on a mobile platform cuts it anymore, especially at near console game prices for the most part. They need to compete with mobile, and introducing players to literally hundreds of older games at mobile game prices is a good way to start.

Exactly. Dedicated gaming is on decline sure, but dead? Was NES and SNES dead because they didn't reach 100m units?

Vivian James was the wrong icon for video games. They should make a new gaming icon and name her Debbie Downer. She'd be a more realistic depiction of the gaming community. SMFH.

Yes there is not enough value for money right now in the handheld console gaming space. Other than killer apps like Pokemon, $40 USD for a 3DS game is a tough sell to consumers. And Nintendo took more than 2 1/2 years to come out with a cheaper sku ($130 2DS). Due to wages not keeping up with inflation, $170 USD is probably still too much for a Nintendo handheld.

Just yesterday with the Boxing Day sales here in Canada, I noticed that Final Fantasy Theatrythm Curtain Call sold out after a $20 price cut ($45 Canadian to $25 Canadian). And other 3DS games on sale were sold out. The regular sticker prices for 3DS games are too high.

If Nintendo launched with a $150 USD 2DS in 2011 (instead of a $250 3DS and later $170 3DS), $30 premium games (that's how it used to be at one point!), $20 budget games and cheap Nintendo eStore titles to compete with the Apple App Store and Google Play and they lowered game budgets by getting rid of stereoscopic 3D, Nintendo would not only have a larger market share but their financials would look a lot better.

Contracting maybe. Dead.... I'll have to wait until Nintendo releases their new handheld, pricing and some games to see if I can consider the handheld market dead. If the price is above $150 and or most titles are not new ips I'll probably consider it dead.

I agree with this, software prices are a big problem, $30 should be the maximum. Hardware price is pretty reasonable but could be better, 3DS XL is almost 2.5 years old and is still at its launch price.

2DS, $99.99

3DS XL, $149.99

Retail Software, $19.99-29.99

Digital only software, $14.99 maximum

In this scenario sales could very well be better but it might be in Nintendo's best interest right now to keep premium prices in order to maximize profits for the rest of the generation and start fresh with their next-gen hardware. Hopefully Nintendo has learned a thing or two from the mistakes they made with 3DS & Wii U and comes out strong next-gen.

Keeping hardware and software prices high will not necessarily lead to more profits for Nintendo. Nintendo is currently losing money. If you price a product too high, the number of sales could drop so low that you'd actually make more money selling the product at a lower price.

Hardware pricing is a problem for Nintendo. $170 for a 3DS or $200 for a 3DS XL doesn't make sense when the iPod Touch is $200. But software pricing is an even bigger problem. Because that is where Google Play and Apple App Store really destroy Nintendo. Very few games can pull in good sales at $40 a pop. In order for Nintendo to generate profits, they need to slash development budgets and lower sticker prices for their less popular games. I still think Pokemon might be priced above the sweet spot. But at least Pokemon is profitable.

In the future, once Nintendo of Japan comes to their senses, you're going to see development budgets slashed and much smaller development teams assigned to games. With big budgets reserved for a select few games.

Nintendo is never going to be the market powerhouse it used to be in a smartphone world. But they can still turn a profit servicing Japan and a niche market in North America and Europe.

If you knew anything about Sean Malstrom you would know that he argues that Mobile Gaming is just PC gaming on the go and that the 3DS and iOS/Droid platforms are NOT competing.

I like I said in an earlier post, Nintendo's worst enemy right now is itself.  Most freemium games that are supposedly taking away casual gamers are just games in the same vein as Flash games about a decade ago.  If anything, they're proof that Nintendo should go back to its roots as Nintendo trying to emulate these platforms with the Nintendo E-Shop is doing far less to prove their relevance but rather show that they can't compete with iOS/Droid at their game.  Nintendo should stick to making their games and not try to be a PC-like platform as that space is already dominated.

Nintendo should go back to what made handheld gamings appealing with the DS.  It was when they made new IP's that embraced casual gaming (Nintendogs, Brain Age and its contemporaries) as well as release new entries in their strongest selling franchises (NSMB, Mario Kart, Pokémon) that the DS outsold all handheld gaming platforms before it.

By the way, the Vita is irrelevant because it's not a handheld gaming platform so much as its a cheaper form of console gaming as most Vita games are just home console ports and the PS3/PS4/X1/X360 are just better at being home consoles than it.