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Conina said:

Why was it a bad move to release a successor to the PSP? Sony got over one third of the handheld market (hardware and software each) at their first try... SEGA or any other handheld competitor of Nintendo would have killed for that share at their time. And no market is too small for two competitors.

Perhaps their Vita investment doesn't pay out in the end... but not even trying and leaving the handheld sector only because it is shrinking and has new competition from other mobile devices? And perhaps the Vita investment does pay out in the end, even if they sell much less than their competitor. Most Vita-owners love the system and the Vita probably doesn't "make them bleed money". The production costs of the Vita hardware should have gone down quite a bit the last two years... the SoC and the touchscreen display have many similarities with hundreds of millions iPhones and Android smartphones, the costs of these components should have fallen dramatically. The change from OLED to LCD should have reduced costs even further. The memory cards should be highly profitable and there is no third party alternative of Trancend or Sandisk yet.

  • Bad move cause the writing was on the wall. I don't make hardware, I am not a multibillion dollar corp, but even I had the common sense to see that mobile/smartphones and their yearly iterations were making handheld gaming obsolete or niche at best. And I could see that 4 years ago. In 4 years it will get a lot worse.
  • The market doesn't just have two players, nintendo and sony are literally competing in a similar space with every single other smartphone on the market. And the ONLY thing the dedicated handhelds have going for it are dedicated buttons. And tehre are even options for those on smartphones. having said that, pound for pound and feature for feature... smartphones are infinitely better than these handhelds on a hardware front, if you can just get around the lack of dedicated buttons in every box.
  • that basically means that your market is going to shrink to the size of mobile gamers that care enough about dedicated buttons to warrant carrying an additional device with them or kids. and these days, even kids want a phone or tablet. 
  • And no one is saying the vita is not a great all round device. Its just not needed.

having said all that, I strongly believe that they should not have bothered making the vita, rather they should have invested more in their smartphones and tablets. This is what i felt 4 years ago before the vita was even announced, and how I felt when they announced and revealed it. What is going on now with the PSV and ultimately with the 3DS says that I was right thinking what i thought.

And most probably too that i am right thinking that dedicated handhelds are gonna become obsolete. We are more likely to see a nintendo gaming smartphone or tablet  with an ingenious way to put on dedicated buttons before we see a new dedicated handheld. 

Trying is nice and all that, but when billions are at stake, working out of a bubble is tantamount to failure. This is something nintendo is also facing with their wiiU. The PS4/XB1 success suggests that there is a business model that works. Nintendo just probably did the single wrongest thing they could have done. Multibillion dollar companies should have better advisers.