A recent survey by analysts Cowen and Company shows that casual gamers have abandoned traditional handheld devices, with only 26 per cent playing on a Nintendo DS, 3DS or a Sony PSP.
"Over the last five years, the penetration of dedicated handheld platforms into survey respondents self-identifying as casual gamers has declined by 29 per cent, with the vast majority of that decline occurring in the last two years," states the report.
"We believe cellphone and smartphone gaming is significantly impacting demand for dedicated handheld devices."
Only 37 per cent of those surveyed played games on a dedicated handheld device, while 52 per cent played on their phone.
"We do not view the decline of casual handheld gaming as a particular problem for the US publishers, as they have migrated their exposure away from dedicated handheld platforms, and in some cases (particularly EA) have invested significantly in phone and tablet platform game development."
"However, we do view this trend as a negative one for Sony and especially Nintendo."
The full report also suggested while consoles were holding up well against more casual gaming models, "there is a substantial gap between the average prices that our respondents were willing to pay and prevailing hardware retail price points." It suggests a price cut would help to boost sales and the console market.