Panasonic has dropped development of the Jungle gaming handheld it announced last October.
The electronics firm surprised the industry late last year by revealing plans to release a new portable system a decade after it last withdrew from the games business.
It claimed at the time that "leading developers" were working on the new handheld, which was designed to run MMOs and online games on a customised Linux platform.
However, the Jungle's potential was quickly dismissed by analysts, who identified it as a "non-starter".
In a statement to Reuters, Panasonic said: "Panasonic decided to suspend further development due to changes in the market and in our own strategic direction."