Realize you're just banging your head against a brick wall on this one. I think the Japanese game industry is in such dire straights, that a paradigm shift needs to occur.
There's only one company that can sell portable gaming hardware to any large degree, especially in these harsh conditions, and that's Nintendo. I'd seize on the opportunity to potentially make an alliance with them.
Nintendo + Sony branded phones/cell phones with physical game controls on them, based around the Vita chip, but upgraded for 2014/2015 with more RAM. This saves a lot of R&D money and Nintendo can provide the software to drive hardware sales, whereas Sony software just doesn't seem to fit handhelds well, and they always get too busy with consoles anyway.
Yes you would probably have to conceed the majority split of licensing fees to Nintendo, but it could help drive sales of your cell phone division and boost sales of your handheld properties. In the end you probably end up making more money riding shot gun with Nintendo than riding driver's seat on your own.
I'd send out an olive branch anyway and have some sake with Mr. Iwata and see which way they seem to be leaning, because I think big changes could be inevitable for Nintendo as well after this fiscal year. Without Yamauchi there to protect him anymore I imagine Iwata may be under much more scrutiny from frustrated stockholders. If there's a stubborn no on their part, then you wish them well and move on, however if you sense there's some wiggle room there, keep sending overtures their way.
