The Vita "just needed one game" before Gravity Rush came out. Then it "just needed one game" before Persona 4 came out. Then it "just needed one game" before Hatsune Miku came out. It has had plenty more than one game in Japan, and it still struggles. Clearly it will need more than one more game.

What I simply cannot believe is that after all these years in the industry, and looking at the failures of previous companies' forays into the handheld market attempting to dethrone Nintendo (and usually failing miserably), Sony STILL hasn't gotten one simple fact through their thick skulls... the market for handheld devices dedicated to gaming has always skewed young. And yet Sony continues to by and large ignore the under-13 crowd while trying to appeal to the 20 and 30 something techie / hipster crowd with sleek, powerful handhelds that are jacks of all trades but masters of none.

Nintendo (up until the launch of the 3DS) has always made great handhelds that were...
1: Affordable
2: Durable / good battery life
3: Kid friendly with a library of games to match.

All of Nintendo's competitors released handhelds that were the antithesis to these three things...
1: More expensive
2: Not as durable / poor battery life
3: Not as kid friendly with a poor library of kid friendly games.

Until Sony changes their attitude towards the handheld market, they might as well just give up on it and focus on their home consoles for the time being.

Eh? Obviously, but you were talking about the Japanese market! Persona and Miku were huge hits in Japan, they just didn't do enough to help the Vita.

Even the Japanese market has not grown so anemic yet that selling 200k makes you a "huge hit."

Right because 75 million + psp's is failing.  Going againts everything you stated makes a portable a sucess.  They start off high, and then become pretty cheap.  Vita is a master at all it does.  Expecially compairing it to the 3ds.  Your right in one respect tho, they do need more games for the 13 and under crowed.  Parents will buy anything for their kids if it makes them shut up.  So puting out Kiddy games and advertising the cap out of them during Saturday morning cartoons will do wonders for the device. 

Hopefully Soul Sacrifice is what it needs. If done right that game will be hotter than Monter Hunter with soy sauce. The reason Gravity Rush and others haven't saved it yet are becuase they aren't craze worthy.

Other than other Nintendo franchises like 2D Mario, Animal Crossing, and the Wii series?

There's main-line Final Fantasy games and... Mario Kart?

Unless Sony can talk Square Enix into making a lot of Final Fantasy remakes/ports, I think Sony is going to have to make a new killer app themselves.

No, one, game is going to do it--they need momentum, and to get that they need several, large, games in rapid succession across a compressed timeframe (as in the same quarter). Anything short of that and the Vita is doomed to, at best, a very, very, very distant second, if it can even survive in that position at all.

Except that the week of Persona's release saw a 150% increase in hardware sales in Japan. Miku's release was even bigger, blowing hardware sales up by almost 400%. All things are relative. Just because they didn't move millions of consoles doesn't mean they weren't huge releases. If the console was cheaper, they would have moved even more units. The Vita needs more than just a single big game -- it has already had several.

I don't think it was a failure, but compared to 150 million + DS's, I'd say the PSP was definitely a disappointment, especially when you consider how strong the Playstation brand was when it launched compared to Nintendo's sorry state back in '04/'05, unlike today where Sony is no longer king of the hill and the PSV is on life support in some territories while Nintendo has reclaimed the #1 spot.  And the only reason the PSP sold as much as it did was because it was easy to hack and to put homebrew / pirated software on it.  The PSP has been dead in the West, especially North America, for years now, and the Vita looks to be following suit much quicker.  I'm not sure if it's a master at all it does, but it's definitely a master at sitting on store shelves.

And don't be so quick to knock the "kiddy" games and image.  I know its a popular thing to do against Nintendo (see Sony's "babysitter" comment in reference to the DS/3DS), but it's the kiddy looking "babysitter" system with the kiddy games that prints money, not the expensive "cool" and "mature" looking one.  Unfortunately for the Vita though, no amount of "kiddy" games will save it because no parent is going to drop $250 on a handheld for their kid in the first place.  Nintendo learned that the hard way and corrected their mistake by dropping the 3DS's price by $80, and now it's back on top of the weekly sales charts like its predecessor was for the past 6 + years.  Again, cheaper handheld with the bigger and better library of kid-friendly games wins every time.