The problem that these handheld systems have is that they're increasingly competing with phones.

I think that the phone market is one innovator away from completely crushing the portable gaming market. All its going to take is for someone to design a smart phone that has good gaming controls yet isn't overly clunky. When I'm on the road I don't want to have to carry both a smart phone and a portable gaming device, especially when the smart phone can play the games. The writing is on the wall IMO. I'm just waiting for it to happen.