Next Generation reports that the US firm also predicts that the overall portable games market is set to grow to over USD10 billion (EUR7.5bn) in 2007.

In a preview of new report, The Market For Portable Video Games, DFC analyst David Cole says: “The DS has the potential to be the best-selling interactive entertainment platform ever.”

The report adds that DFC “expects the Sony PSP to establish a solid position in the marketplace” depending on the amount of promotion Sony gives the console in future, and that some console game publishers have managed to generate over USD100 million (EUR75m) in revenue from a single PSP game based on well-suited franchises.

Cole goes on to argue that casual games, RPG, MMO and turn-based strategy publishers can particularly benefit from the growth of both consoles.

Cole added: “Under the right scenario, 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.”