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Its not just the Vita price, but all the bells and whistles it needs to go with it that hikes the price up to an insane level.

For example, you can get yourself a 3DS along with a fine game like OOT or MK7 or Super Mario World for anything between £130-£150 (I got my 3DS with OOT for £110, but that was on an auction). Compare that to the Vita Wifi only, the console along with a memory card (which you must have) and a game like UC:Golden Abyss will cost you anything between £270-£300, pretty much double that of the 3DS. The PS3 still itself costs less than £200 now, so not many people would shell out that cash for a handheld.