The crucial difference between now and then is the role smartphones play and, more specifically, the impact of cheap digital downloads.
Flurry's most recent report an update to one compiled by marketing veep Peter Farago in 2009 suggests the handheld market is indeed in decline, being squeezed simultaneously by the home console sector and the smartphone market.
Mobile momentum
The firm's numbers suggests the share of revenue generated by portable games DS and PSP - has fallen from 24 percent in 2009 to 16 percent in 2010.
That coincides with a growth of the home console market up 5 percent in the same period and the rise of iOS and Android, which now account for 8 percent of all revenue.
"Overall, total US game revenue from 2009 to 2010 is relatively flat, totalling $10.4 billion and $10.7 billion, respectively," reports Flurry's Peter Farago.
"However, while console game revenue increased slightly, from about $7.4 billion in 2009 to $7.8 billion in 2010, the combination of declines in portable gaming software and a jump in smart-device app sales has squeezed the portable game category down."
History repeating
Farago believes its a combination of a rise in iOS and Android's userbases, and the role new monetisation models such as in-app purchases have to play that is helping game revenues on smartphones surge and, in turn, squeezing handhelds.
In particular, DS's reliance on boxed game sales meant it spent 2010 in decline. Farago compares Nintendo's current position to the one Nokia has found itself in with Symbian.
"Recently, Nokia CEO Stephen Elop, passionately described a burning platform Nokia had itself set ablaze, largely as a result of its own strategic choices," Farago adds.
"Allegorically, despite Nintendo CEO Satoru Iwata's stated concern that 'these [mobile] platforms have no motivation to maintain the value of gaming' during his keynote at the most recent GDC conference, Nintendo may also be struggling with its own burning platform: Nintendo DS."
Portable problems
A closer look at the portable market shows Nintendo DS game revenue has dropped from 70 percent to 57 percent, all while smartphones have charged to a 34 percent share.
"With both Nintendo DS and Sony PSP shrinking in sales, while smart-device game sales simultaneously grew by more than 60 percent iOS and Android games now represent more than one third of the portable game category," Farago concludes.
"The net effect is that the US portable gaming category, as we define it, has declined from $2.7 billion in 2009 to roughly $2.4 billion in 2010."
2011 has, of course, seen the launch of DS's successor, 3DS, though its continued reliance on boxed games perhaps offset by the arrival "sometime" of Nintendo's digital download solution eShop suggests it could face an uphill struggle to hold onto DS's revenue share in the coming years.
[source: Flurry]
