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Soundwave said:
They are going to need both. Large price drop and much bigger games. Pikmin 3 and Wii Fit aren't saving this trainwreck, its headed to Vita town already.

It's doing bad, but not even close to Vita town yet. PSP was less popular to begin with and never had a proper killer app in the west (also with MH4 it has lost its only killer app in japan), also Sony is using all of their AAA studios to produce home console games. On the other hand Nintendo will have its best teams working on the console. If in year from now and after a price cut nothing has changed, then we can agree it's gone to Vita town.