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Portability is really just a spinoff using small-scale technology. As yet, handhelds cannot offer the brilliance of graphics or sound that the consoles can offer, therefore at present they cannot make a dent in the console market.
The thing that made handhelds really take off was 'Tetris', one of the most addictive games ever made, and once you'd tried it on a mates Gameboy or GameGear, you were hooked and had to get your own.
Until someone brings out a handheld that can match the latest console for graphics, gameplay and sound, consoles will rule and arcades in the old traditional format will have to continue to gain revenue by adding more and more slot machines instead of arcade games.
The GBA can just be regarded as convenient for those who have plenty of time to enjoy gaming on the move, like schoolkids, train commuters, passengers, people on holiday and so on. It will replace the Gameboy and Gameboy Colour longterm, and will dominate the handheld market, because no other company seems to want to try to oppose Nintendo in that particular business sector.
True gaming, that offers a long term challenge and enables you to chop and change games at will without having to carry them around with you, that is also more rewarding long term, can still only be found on consoles. The games are bigger, more detailed, you can spend more time concentrating on them, and become more immersed in the gameplay.
It will, however, make the experience of playing games on the move a much more enjoyable one and make that trip to your grandparents old house in the middle of the woods (that has only a black and white TV and a Betamax video for entertainment) a less boring time.
I think that the main reason behind this is that the screen size stops you from making the games a more social experience. Sure, with link up leads it could make the perfect machine for portable deathmatches, no looking at what the other player is doing on the other side of the screen, as you do on other consoles, but ultimately it will never match up to a nice big screen version.