Sony would be called a wise company.

Thats interesting. I had thought the Vita itself was profitable from day 1, but that it would take 3 years for it to pay off it's R&D bill.

Vita will be around for a while. If anything, it'll be a niche system at the very least getting ample support from the small (but dedicated) otaku crowd. Vita has some nice titles coming out next year. None that will move any units (save for Tales of Heart R and Soul Sacrifice, but solid titles nonetheless.

I just hope Nintendo remain aggressive with the 3DS and continue to deliver. A healthier Vita would've ensured this, but I hope Nintendo can keep up the momentum even with Vita putting up little competition. They can start by bringing some games out over here.

I would be pretty upset, because I really am thinking about getting one eventually and I do not wish the death of any system.

It would be disasterous for Sony ...

Even if third party publishers are cutting back on development there are still (probably) hundreds of games under development to be released in the next 2 or 3 years. These games would be under production from almost all of the biggest publishers in the world and each would represent a multi-million dollar investment. Sony dropping the PS-Vita now would create serious problems with all third party publishers.

Beyond that, with the PS4 coming out Sony needs to keep their early adopters and loyal fans as happy as possible and not give them any reason to wait and see how the PS4 will perform before they buy it. While I think most people will have forgiven and forgotten the early PS3 price cuts as long as the PS4 launches at a reasonable price, I don't think they would want to anger them by turning their $250 gaming device into a paperweight.

It would mean Sony mobile would transition over to Android support and that would signal the death knoll of their $30-40 retail box games for dedicated portable gaming systems.

And without $30-40 retail pricing, budgets for mobile titles would drop to something on par with what goes into the typical iOS or Android mobile game. This is not to say that great games with plenty of depth would not still be possible seeing as how games in the mobile space have been improving rapidly in quality yet for the most part remain well under $10 in all but the rarest of instances.

It's pretty pointless to say "then I'd never buy another Sony handheld again!" seeing as how they wouldn't be selling another handheld again as such a move would signal their end of portable gaming systems.

It's also a bit pointless to say "then third party developers will never support Sony handhelds again!" seeing as how there would no longer be any portable platform to support anyway and Sony mobile would become primarily a software developer for mobile platforms. Unless they want a Playstation brand phone.

Won't venture to guess how that would effect PS4 development, but those who are supporting the platform are already waist deep in development for their first titles on the platform. Any developer to abandon ship that early because of the Vita, probably didn't have anything substantial in development anyway as mediocre titles often do (as they should) get kicked in the head.

Well, I am not a super hardcore Sony fan, I really enjoyed the PS3, and it was my main console for this gen, but I am not so loyal to them that they can do no wrong. If the Vita was discontinued, I would probably go to Xbox next gen. I love my vita, and I expect decent support. I bought the Vita for a 5 year cycle at least, anything less, and I will cut all ties with Sony. Customer loyalty is very important to me, and the Sony was really loyal with the PS3, the constant support, PS plus, and frequent improvements and added features really struck a soft spot in me. That is most of the reason I bought a Vita, because I knew it would just get better and better.

If they stray from such loyalty, I will go elsewhere.

it wouldn't affect my future decisions too much. MS killed Xbox1 early and nintendo killed virtualboy. it didn't affect my decisions. i think it would mean an end for there handhelds, but i think the affect on ps4 would be minimal.

It would stop selling

This is kind of what I mean. The 250$ vita is likely profitable with one game, especially now that the exchange rate has gone up over ten percent since release (both in euro and dollar) and Sony had only predicted a forex of 80 and 100, and it now stands at 85 and 113. The system is likely profitable without a game or memory card, right now, given this fortuitous turn.

But at launch, to correct the history, at launch it was not profitable. Though it is believed that the 3g 300$ version WAS profitable, the wifi version was considered to only be profitable with a memory card and game attached to the sale. Currently though, it should be reliably making healthy margin profit.

The 3 years would also take into account planned price-drops. Obviously, when detailing to investors, they would make sure that they didn't have to apologize down the line by saying "we didn't expect to drop the price". The prediction should include any upcoming price-drops, but possibly does NOT include PS+ revenue and subsequent memory card attach rate. I'd say it's going to take a little longer than 3 years looking at the current situation, unless Sony is able to turn it around and the Vita starts to kick off. Hopefully, we are also undertracking it by some fair margin.