Nintendo's DS handheld has taken the industry by storm; that's no secret. In Japan the Nintendo portable has been out-shipping Sony's PSP on a nearly three-to-one basis. Moreover, in 2006 the DS almost single handedly elevated the Japanese video game market out of its previous doldrums. On this side of the Pacific, not only is the DS consistently outselling the PSP, but it often outsells all consoles. In February, the DS was once again No.1 with 485K units sold.

With the above in mind, it's not surprising that DFC Intelligence's David Cole believes that the DS could very well become the No.1 video game platform in history. "The DS has the potential to be the best-selling interactive entertainment platform ever," he said.

This comes from DFC's latest report on the portable gaming market, which the firm predicts will exceed $10 billion in worldwide revenue this year, led by the DS. DFC said that the PSP will "establish a solid position in the marketplace" but that much of the Sony portable's fate will depend on how much effort Sony Computer Entertainment decides to put into promoting the platform over the next few years.

DFC is so optimistic about the portable sector that the firm thinks it will soon lead the market instead of supplementing the console space. "Under the right scenario, by 2011 the combined installed base of the DS and PSP could exceed that for the Nintendo Wii, Sony PlayStation 3 and Microsoft Xbox 360," noted Cole.

Naturally video game publishers are going to want a piece of the portable pie. The opportunities are many. "Historically, Nintendo has been able to dominate the portable game market by developing games specifically suited for the unique attributes of the portable platform. However, there is growing opportunity for third party publishers and developers of portable games," DFC said. "... publishers of not only casual games, but even developers of high-end PC games like role-playing (RPG), massively multiplayer online games (MMOGs) and turn-based strategy, could benefit from the rising use of portable platforms among adults. Meanwhile, existing console game publishers have found it is possible to make over $100 million in revenue from a single PSP title based on the right franchise."

DFC's full 185-page report The Market for Portable Video Games outlines two forecasting scenarios for the DS and PSP, the possible future entrance of new portable systems by 2009, complete five-year forecasts by platform, and revenue expectations for game publishers.