Analyst: Market shrinking for gaming handhelds, but there's hope

Nintendo and Sony are fighting an uphill battle against the staggering popularity of smartphone devices these days. But he and another analyst say there's reason for handheld gamers to hold out hope. “The market for adult casual gaming on portable gaming hardware has practically disappeared since … smartphones and tablets have arrived,” Peter Warman told Venture Beat.

“As long as Apple and Samsung do not promote their iPod-type devices as portable game consoles for kids, the 3DS might be around for a while … [and] the Vita will cater perfectly to [tech-minded youngsters],” Warman added.

Jesse Divnich of EEDAR also offered some commentary tempering the handhelds-must-die attitude in the gaming industry.

“The sandbox may not be as big as it was back in 2009, but there is still plenty of room for Sony and Nintendo to generate significant profits, as well as the third-party publishers that support them,” he said.

“There will always be a large and significant market for dedicated portable gaming, but we do believe it is a shrinking category that will eventually plateau to a sustainable market size for at least two competitors,” he continued.

So according to these guys there's no reason to fear that handhelds will go extinct any time soon, but the fans need to keep it alive. There's no question that it's going to become a more niche market, but that may not be a bad thing. Perhaps their game catalogs will start to skew more towards hardcore gamers than the younger audience they cater to now.