Even though it may seem crazy, I think Sony should ride out the Vita for another year, but behind the scenes fold the platform and get in touch with Nintendo and see if there isn't an alliance to be had in the long term, whereby they basically shut down their handheld division, but agree to help Nintendo in the future.
Nintendo will need a hardware partner for future portable devices, because no one is going to buy a "Nintendo brand" cell phone or tablet.
Why an alliance? Handheld market in general is in big trouble. Sony may as well hop on the one gravy train that's still going, and they're both Japanese companies so it works from that front too. The DS/3DS brand is in decline too, one that probably isn't going to reverse with more kids getting tablets/smartphones.
35k for Vita in the October NPD is just freaking embarrassing. It's time for Sony to take bold steps IMO if they want any future with portable gaming at all.
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