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There's no handheld market for the Vita.

Who is this thing supposed to appeal to? By the time kids hit 14-15 they're a lost cause because smartphones are the hub of their social life (screw just video games, lol). Adults? No way.

Kids? That's Nintendo's territory, they have too many family friendly IP for Sony to compete and lower priced hardware that parents prefer. Not to mention Pokemon. The big gun IP that sell Sony's console franchises like Call of Duty and Battlefield and BioShock just aren't the types of games people want to play on the go, if that's the type of game you like, you want to play it on a big screen.

Japan is Vita's best bet to carve out some kind of viable no.2 position behind the 3DS.