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RolStoppable said:

1) and 2) We are getting more and more in the territory of personal opinion and gut feeling here, so let's just wait a couple of months and see how it plays out. That's a better option than just repeating our point of view over and over again. Granted, the PSV does have more games than the PSP that are worth considering a purchase, but except for Uncharted, none of them seem big enough to make people want the system immediately.

3) Same as above. By the way, launch window usually refers to the timeframe from launch to three months later.

4) That's a lot of work you did there, but I think it's kinda missing the point. Out of the 19 games that performed significantly better in the West, 19 have always performed significantly better in the West. No outliers here. But there are a few games that have historically performed better in the West and then on the PSP performed better in Japan.

But more specifically, the original point here was that Japanese gamers are more accepting of handheld gaming while Western gamers often see it as second rate gaming. Instead of just comparing the sales of PSP games between the different territories, you should compare the sales of PSP games to the sales of their respective home console counterparts in each territory. Japanese PSP releases in general should be fairly close to home console releases of the same series while in America and Europe you should see significant dropoffs.

5) Okay.

6) Okay.

7) If you make the suggested sales comparisons of point 4), you'll see that it holds true that Western gamers prefer to play blockbuster games on a big screen. The only way Sony could get the DS audience is if Nintendo messed up big time. Mistakes on price and software lineup on Nintendo's part would make the DS audience up for grabs. Nintendo made these mistakes, but Sony was incapable of capitalizing on it for several reasons. Nintendo's head start, Nintendo correcting the mistakes sufficiently by now (although not completely) and Sony setting themselves up to repeat Nintendo's mistakes on price and software lineup. 

Right now the 3DS has a clear advantage when it comes to price and software lineup and it looks like that advantage will only be growing in the foreseeable future. By the time Sony gets there, Nintendo will have a lock on the DS audience. The recently announced 2D Mario game is scheduled for a 2012 release, that's about how long Sony has to close the gap. They aren't going to pull this off, it's simply not enough time.

But since you brought up a crossover between two audiences, why not look at the reverse case? What if Nintendo managed to get both the DS and PSP audience to buy the 3DS? This would put Sony at an even greater disadvantage and Nintendo indeed already has Monster Hunter exclusivity and Resident Evil: Revelations, games that should be very appealing to the PSP audience. It's unlikely that Nintendo can sell to everyone, but by the looks of it, they are on track to at least absorb some of Sony's userbase.

Okay for 1), 2) and 3), let's follow the trends as usual and see if either is right (if you're cool with that).

Thanks for your suggestion in 4). I may just do that and post it here later today, as a final view on the point. I think ultimately you are right, but I just think it was a little overly weighing to your end. With data we'll rectify perspective, you will be right, but at least have a more balanced view. I'll try to help and post that later. When I do, I'll edit this post and PM you.

7) You bring up excellent points. For this, as for 1), 2), and 3), numbers cannot guarantee. I still think it can go both ways personally, but that's given the games we see on 3DS as you mentioned (Nintendo capturing Sony core), and my view on the appeal of games like LBP and the indie touch games, as well as UC (Sony captivating some of the mass). Ultimately my guess is it should even out, with Nintendo losing a bit of market compared to last gen, and Sony having a small jump compared to last gen.

Last-point) The pirate userbase of the PSP did not foster game sales at a significant volume, other than sales attributed to the core base. I believe the Vita will have a totally different userbase (as well as the original PSP core), one which fosters sales. My prediction is that the Vita will at least have a much better attach ratio. I'm guessing something like 6 to 7, in contrast with PSP's 3.75. This should translate into healthy revenue for Sony, as SW sales are generally where the bulk of the profits lie. More revenue means better morale, better games forstered by cash and morale, better word of mouth and better advertising. I think Sony will profit to our surprise. Time will tell.