The February NPD numbers were released this week, showing that handheld console sales are still lagging far behind the segment’s historical highs. One bright spot was that Nintendo 3DS exclusive Bravely Default cracked the top 10 software sales chart for the month, but overall handhelds are quickly becoming niche products as consumers begin to embrace mobile gaming.

A DigiTimes Research report out this week predicts a rather bleak outlook for handheld gaming. The report points to Sony’s PS Vita console, which has seen poor sales throughout its lifetime despite being a very advanced piece of gaming hardware. Sony’s new PS Vita Slim redesign of the handheld could move units in the near future, but likely not enough to make the device a real competitor to the 3DS.

Though price and lack of software could be to blame for the recent downturn in handheld gaming, DigiTimes believes as so many other market analysts do: mobile gaming is crushing handhelds. The report points to the still-growing mobile games industry as proof that mobile games will soon replace traditional handhelds. Major games publishers such as EA and Square Enix are now seeing high profit margins for their Android and iOS titles, a fact that will continue to push publishers toward the massive potential gamer install base that such devices now have.

In addition to mobile software, DigiTimes predicts that mobile gaming peripherals will eventually take the place that handhelds now hold in the market. The controller attachments market is wide open at this point and peripheral-makers are seeing greater opportunities as smartphone hardware and mobile game design improve.