Handhelds Being Edged Out By Phones?

While the PSP and DS have become economic powerhouses over the past few years, a number of developers are voicing concerns that handheld consoles might soon find themselves almost entirely replaced by smart phones.

"Right now you can buy tons and tons of fun on iOS with the price of a single handheld console game," Remedy Entertainment said to IndustryGamers in an interview. "Heck, you can get tons of fun for free with advertising based concepts. So I do think the traditional handheld consoles will need to reinvent themselves if they want to compete."

Developer Silicon Knights echoed Remedy’s assessment.

"I think the market is changing in a radical fashion,” the company said.“Barriers of entry are literally being blown away. New business models are booming and this is not about devaluation.Facebook is doing tremendous things to gaming and attracting completely new people to enjoy different more casual and social games. I can't see how the fact that mainstream consumers are finally embracing our industry could be negative. After all isn't that what we've been hoping for since forever?"

Despite strong initial sales, the 3DS has seen a tremendous drop in units sold over the past few weeks. Sales of the PSP have also tailed off somewhat, though Sony hopes the NGP will take care of that.

Source: CVG