The popular consensus in 2004 was that Nintendo was heading for the exits, just like Sega. It was only a matter of time before they quit the hardware market and either returned to making playing cards or became a Playstation developer. The announcement of the Playstation Portable only seemed to cement that belief. Thankfully, Nintendo had other plans.
It's also important to remember that nobody--and I mean
nobody--understood what Nintendo was doing at the time, giving long speeches about getting out of the technological rat race and pursuing something called a "blue ocean" strategy. The arrival of the Nintendo DS was met with puzzlement, curiosity, a little bemusement. Nobody knew what to make of it.
It's clear that Nintendo was carefully planning their strategy for some time, but it's also quite understandable if the DS was rushed to market a year earlier than they might have originally wanted. As much as I love the Gameboy Advance (the GBA SP model has always been a cherished favorite), there's no way it could have competed directly against the far flashier and more powerful PSP.
The DS captured Nintendo's stubborn quirkiness perfectly, arguably better than any system they ever made. It calls back to the ancient Game & Watch handhelds while also looking forward to capturing the "casual" and "lapsed" players who would be interested in something novel and new. I remember seeing touch screen mini-arcades at neighborhood coffee shops and bars, and was impressed by how popular those machines became among patrons, especially women. Nintendo was very clearly paying attention to that as well, and they understood their future lay in returning to the very roots of videogames. The new message: simplify everything.
The touch screen opened up exciting new possibilities for videogames, breathed new life into puzzle games--Meteos and Zoo Keeper became stone cold classics--and brought gamers back to the glories of long lost eras. New Super Mario Brothers brought back 2D platformers from the dead, Animal Crossing taught us the wonders of digging around and goofing off, Brain Age was micro-gaming genius (also helped to have one of the best Sudoku programs anywhere), Clubhouse Games played like a stack of Atari 2600 cartridges (the shuffleboard game was fantastic). And let's not get started on the massively successful Nintendogs franchise.
The best thing was that DS wasn't even interested in trying to compete against PSP. The two handhelds might as well have existed on two different planets, and that's just fine by me. Let them coexist. Sony ended up selling 80 million units of their portable system, which was oddly dismissed as a "failure" because Nintendo nearly doubled those numbers.
Of course, from DS you get to the Wii, and from there you get iOS, Android, Virtual Reality and, eventually, Nintendo Switch. Sony's PSP did well, but its successors--both the PSP Go and Vita--failed to sell anywhere near the numbers of the original, and now the company has left the portable market. Smartphones eventually ate up everything, including the 3DS, but Switch has proven to be a sustainable counterattack, blurring the boundary between "console" and "portable."
Is there a point to this story? I dunno. I like stories. The important thing is that I was wearing an onion on my belt, which was the style at the time.