Actually they have an opportunity to really have an impact in 3rd world countries.
BuilD a Handeld and a console, both using the same platform (little 500mhz ARM processor) , wireless controllers for the console, and make the handheld as basic as possible (4" 4:3 LCD, D-pad 6-8 buttons), let both share the same library of games, release the SDK for free to local developers and sell the unit as cheaply as possible R500 / $50 mark, for the console and R750 / $75. And you might have a game changer in the cheap budget area of the markets.
It might sound expensive but remember console prices in 3rd world countries are much more expensive in the first place , offering a cheap alternative from China might sway people from getting PS2 consoles (Still selling well in South Africa) or used consoles...