I guess Kotick has become even more short sighted.
Developers make an average of $4,000 revenue for a smart phone game; that market is already over saturated and will only become more so. And, there is already talk of the smart phone market bubble burst that will occur from this.
The PS Vita is taking a blue ocean strategy and expanding on the market niche the PSP has started. The market is targeting all existing PSP owners and traditional gamers that have never owned a portable console. And, anyone who wants a device that is 1/3 the size, 1/2 the price, and 2 times as powerful as an iPad 2 without having to sift through thousands of junk apps to find actual quality games. The Vita also offers new unique ways to play portable games and has robust social features built into the device.
Overall, the Vita is offered at a lower price, with higher quality content, and is actually a differentiated product compared to smart phone #345 or tablet #56.
Saying a gaming device like the Vita can't be successful because people have phones is like saying home consoles can't be successful because people have PCs.
