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It will do fine in Japan. The games are coming at a steady pace. Developers have discovered that Vita owners buy software. The Vita has a high attach rate.

The west is a different story. Major western developers just won't make games for handhelds at a reliable rate. Sony's best bet is to create some kid-friendly titles, throw them out, and see if anything sticks. Kind of what they're doing in Japan with hunter games. They need something with cartoon characters or cute monsters.