Is the handheld console still relevant?

Uncharted and Zelda are great, but are people happy enough with Angry Birds in their pocket?

PS Vita looks great. Sony's new handheld has twin analogue sticks (for COD on the go) and graphical power to match PS3, all for only £280 - which is very cheap considering the technology involved is right on the cutting edge.

PS Vita smashes iPad, iPhone and 3DS in terms of graphical power, and gameplay experience. A full set of buttons is always going to be more useful than just a touchscreen - and Vita's got one of those, too.

But PS Vita could be a huge failure. The handheld market has changed so much in the last five years since the original PSP release, and PS Vita may just represent an outdated business model.

The 3DS, Nintendo's newest handheld, has had a stuttering launch, and while the lack of games must be partly to blame, it's tempting to see the rise of the smartphone as the real culprit.

Do people still want to play on a dedicated handheld? Do the masses want to lug around a hefty handheld console when they already carry a smartphone everywhere they go?

That smartphone, too, already has games. Nothing on the scale of Uncharted, like PS Vita, or Zelda 3D, like 3DS. But thousands of games ranging from free to a few pounds/dollars. Why spend £40 on a new 3DS game when you've got Angry Birds expansion packs at no extra cost?

The smartphone, whether iPhone or Android, is clearly a huge threat to the handheld gaming market - and threatens to destroy the market entirely.

There is one thing that can save PS Vita and 3DS though: Differentiation.

What Sony and Nintendo must do is show people that these consoles offer a rich enough, a different enough experience to warrant the extra expense; the extra pocket weight, the dedicated games machine.

Sony need to show that having a PS Vita means having a PS3 in your pocket. Uncharted: Golden Abyss (Pictured, right) is basically a full-fledged version of the blockbuster franchise, and it looks every inch as beautiful as its bigger brother, but it's portable. The iPhone will never have that - and even if one day smartphone graphics caught up, the iPhone lacks the twin analogue sticks, face buttons and Trophies.

Will it be enough? Not for some. But there will always be a crowd looking for a deeper experience and I think Sony still has a market to aim for; a market who want Smartphone + 'proper' games machine.

Nintendo has a bigger task on its hands. Aiming mostly at casual gamers, Nintendo has a tough time persuading the people who bought a DS with Brain Training, or Professor Layton, or Sudoku, that the 3DS is what they need next.

The 3D is the key differentiation for Nintendo, but even that will not last - Glassesless 3D capable smartphones are coming, and they're going to be here by Christmas.

The only thing Nintendo have left are their big franchises: Mario, Zelda, Pokemon, etc. These games will never appear on an iPhone, and the company now more than ever needs to rely on these games' appeal to push the 3DS into peoples' hands.

But it all seems a little desperate. In reality, both companies' business models are beginning to look a little dated.

Differentiation may save them for now - but one day, iPhones or other Smartphones will figure out a way to close down these differences, too - and both game makers will have to try to stay one step ahead or risk falling behind.

Looking at the 3DS sales, I fear it may have already happened.