"I'm completely baffled by Sony's PSP strategy," said the Wedbush man.
"They owned the portable entertainment market with the Walkman, and sat back and watched as Nintendo dominated games and Apple dominated music.
"They never quite got it right with an MP3 player, and their initial effort in games was a bit too pricey and sophisticated for the majority of the portable gaming market (kids under 13)," he continued.
Pachter went on to say that Sony might still need to consider price cuts for its handheld.
"I continue to think pricing is an issue, but if the 3DS comes out at $249, the $169 PSP might seem like a bargain."
"If Sony were really smart, they'd emulate the 3DS and put a 3D screen on the PSP2."