"The DS has the potential to be the best-selling interactive entertainment platform ever," says David Cole of DFC Intelligence—a money quote if we've ever heard one.

In DFC's new report, "The Market for Portable Video Games", Cole highlights the performance of the Nintendo DS, 2006's star performer, though he also expects there's room for Sony's PlayStation Portable to establish a solid market position—depending on the focus Sony opts to give it. "Under the right scenario," Cole says, "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."

The report also says that while Nintendo has traditionally dominated the portable software field with its titles built specifically for the platform, the opportunities for third parties are growing—not only for casual titles, but even for developers of high-end PC games like RPGs, MMOGs, and strategy games—due to the increasing uptake of portables by adults.

DFC expects the market to exceed $10 billion in 2007. The full report is available from DFC.