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What's left of the shrinking handheld market is just big enough for Nintendo to eek out solid numbers in North America and Europe. In Japan, people use their handheld as their primary game console, so Nintendo is safe there.

Vita unfortunately is the odd man out. There's no space for it as a product.

Sony's better play would be to make a Vita phone next year. It probably wouldn't do gangbusters, but it'll sell OK I think. I would probably get one if it's the same basic Android functionality that other phones have + the abiity to play Vita/PSP/PSone games in a pinch, I'd rather have that than a Samsung Galaxy to be honest.