I feel like it's apt to bring up the 'post-desktop era' that Steve Jobs thinks he's created. He hasn't, because that's ridiculous, but I feel like it's the future Cheapy D sees (at least partially)
I could write a lot on how I feel about the misinterpreted 'iPhone Revolution' but I'll stick to games.
The market is different now, not because of smartphones but because of misdirection. Sony competes in many fields, many more than Apple does, actually, and that's probably why they can't pump out a new PSP or PlayStation every year. It's much more difficult to compete with a cell phone because phones are essential to our everyday lives (and Sony makes and sells just as many phones as Apple does), so the point of competition is a little biased. Very few to zero people buy an iPhone with the thought of it playing games, or having an indepth gaming experience. Most people who I see playing games on their smartphones play the same assembly of simple cell phone games we were playing five years ago. Even if games like Fruit Ninja, Cut the Rope, Angry Birds and Infinity Blade have changed the way we see that, it still doesn't change the masses. I want to say it again, Very few or zero people buy iPhones so that they can play those games.
Similarly very few or zero people buy handheld gaming systems for functionality beyond playing games. The issue is that this space has become very awkward. High-end gaming systems are expensive (not as expensive as high-end smartphones though) and have somewhat limited functionality. Sony has tried amending this space with the Xperia Play, but I think this is all still misdirection.
Honestly, I don't care if my PSP or DS can browse the internet or have amazing graphics, but Sony and Nintendo know people want that. Sony knows that people wanted streamlined consoles and experiences. Perhaps they went about it wrong but they gave us the PSP Go. Nintendo knows social networks are all the rage and so they added StreetPass. The issue these hardware developers have run into is keeping the price low. It's okay to have a $800 smartphone because any service provider will subsidize most of that price in trade of you paying for their service. This is why you can buy an iPhone for $100. However, Sony and Nintendo can't do that since there is no dedicated market. No one wants to buy a $100 PSV so they can pay $50 every month for some service.
But at this end, I don't know where to go personally. Is the mobile gaming market dead? No, certainly not. Android and iOS show us a very lively market that is developing and evolving. Will we see another 3DS or PSV in five years? I don't know, but I wouldn't bet on it. Sony has already shown their interest in making high-end Android-gaming Smartphones. Will that succeed? I don't know, but Tommy Refenes has one, and that's good enough for me.
