There's a lot of attention being paid to tablets cannibalizing PCs. As we've said in the past, we think PC cannibalization from tablets is overstated. But the cannibalization phenomenon is real: We wrote in a June report (The Products That Lose When Tablets Win) that we expect tablet cannibalization to accelerate in the next six to 12 months as slightly less affluent consumers buy tablets and have to make tough tradeoffs. Several predictions we made in the report are already coming true. We made the call that:

"Portable game player sales will go off a cliff. Portable game players (PGPs) like the Nintendo DS already have huge penetration, so there's a natural saturation point that PGPs are reaching anyway. That saturation combined with cannibalization from tablets and smartphones, which fulfill the same casual, on-the-go gaming scenarios but also multitask with email and other applications, spells trouble for PGPs. The Nintendo 3DS is already reporting weaker-than-expected sales, and we expect this trend to continue."

Much to Nintendo's chagrin, this prediction is proving accurate, as Nintendo reported that its 3DS sales plummeted to 710,000 units this past quarter from 3.6 million units the quarter before.

In the June report, we also wrote that game console sales would not be negatively affected by tablets and could actually see a boost from increased interest in gaming as mainstream consumers find joy in games like Words With Friends and Angry Birds. 

After email, information lookup, and gaming, watching video is the most popular consumer use for tablets. While 81% of tablet owners report using their tablets in their living rooms, only 9% report using their TVs less often since getting a tablet. Tablets and living room TV are largely complementary, but we do anticipate cannibalization of smaller TVs in other rooms of the house. In the June report, we wrote that:

"Small-screen secondary TV sales will soften; large-screen primary TVs will be unaffected. We anticipate that consumers will still use and replace their large living room TVs, but that TVs in other rooms where tablets are frequently used, such as an adult's bedroom and the kitchen, will be replaced by tablets. We anticipate that as those secondary televisions age, many of them will not be replaced, which will have a negative impact on small-screen TV sales."

Notably, the Consumer Electronics Association (CEA) recently reported a drop in small-screen TV sales, while large-screen Internet and 3D TVs are growing.

Forrester clients can access our full report here for more of our predictions on how tablets will impact consumer electronics and media products.