It seems each year that I've gone to TGS, the mobile games section grows more and more. I avoid it every year because mobile phone games invariably look like shit, but this year it was undeniable - this is a major part of the Tokyo Game Show, and a market that's not just viable, but growing. I don't think mobile games are gonna supplant the PSP or the DS anytime soon, but I can definitely see them complementing portables. I'm actually a bit worried that, in Japan at least, the focus is going to turn to these types of games - we've already seen a big franchise go to the DS for its latest installment (Dragon Quest IX).
Will we be relying mostly on Western developers for console gaming in the future, I wonder? :/