Gizmondo

Tiger Telematics' ^[1] sole attempt at entering the lucrative handheld gaming market, and one of the more interesting failures in video game history.

The handheld began with massive potential — unlike most of its competitors at the time (sans the N-Gage), the Gizmondo supported real-time, fairly-good 3-D graphics along with 2-D sprites, and besides games it had the built-in ability to take pictures, send emails, and play movies. It even worked as a fully-functional GPS! This is before most people had a smartphone that did all that, so having a device that did much of what a smartphone could do was very appealing for the time.^[2]

With all that backing it up, you're probably wondering "Why didn't this handheld sell like hotcakes?!" Well, the reasons are fivefold:

The marketing was almost nonexistent — it was only available on their website, in the occasional strip mall, or from the Gizmondo shop in London's Regent Street (which apparently chewed up a ton of the parent company's money and contributed to their early demise).
There were two versions released at the same time — the main version had the attractive price of $400, and while there was a budget "Smart Ads" version for about $230; the only difference was forcing you to sit through commercials while playing!
The screen wasn’t that much larger than a single screen for a Nintendo DS, but it was diagonally smaller and lower resolution than a screen for a PlayStation Portable.
A positively pathetic battery life of 90 minutes when playing games!
Speaking of games, there were only eight released in the US and none were well received by critics...although it did result in some rather quirky titles like Stickyballs and Momma Can I Mow the Lawn?

The Gizmondo was dead on arrival, selling an abysmal 25,000 units and becoming among the worst-selling systems in video game history, handheld or console. It also forced the company that made it into bankruptcy. While a revival attempt was planned circa 2008, it was largely overshadowed by the fact that co-creator Stefan Erikson was involved in the Swedish Mafia, has been arrested on drug and illegal firearm posession charges, and was later found on a crashed Ferrari after speeding against a Ford GT; all of that basically killed whatever chance the Gizmondo had left of making any kind of comeback.

On a side note, the handheld made the top of ScrewAttack's Top 10 Worst Video Game Busts list.

↑ No relation to Tiger Electronics
↑ To do what the Gizmondo did when it came out, one would need a digital camera, an iPod or other portable media player, a dedicated GPS unit, a (Not yet ubiquitous) smartphone or personal digital assistant, and a portable game console. Each of these would often be sold for over $100, and one would then have to keep track of, maintain, and upgrade each. Thus the value proposition on the face of the Gizmondo was very good for its day, since it more or less had all their capabilities and was just one device to bring with you.

[1] No relation to Tiger Electronics

[2] To do what the Gizmondo did when it came out, one would need a digital camera, an iPod or other portable media player, a dedicated GPS unit, a (Not yet ubiquitous) smartphone or personal digital assistant, and a portable game console. Each of these would often be sold for over $100, and one would then have to keep track of, maintain, and upgrade each. Thus the value proposition on the face of the Gizmondo was very good for its day, since it more or less had all their capabilities and was just one device to bring with you.

[1]

[2]