First, let's look at when the PS Vita released and the circumstances surrounding it. Sony's biggest competitor, Nintendo, was struggling mightily with the 3DS. As a matter of fact, during the first few months of the 3DS's life, multiple publications (most notably IGN, and their now notorious "why the 3DS failed and the Vita is set to succeed" article) had proclaimed the PS Vita as the first handheld to overthrow Nintendo. Sony had everyone's attention, the press was theirs, people were not buying the, at the time, overpriced 3DS, and they had massive momentum from the major late life success of the PS3 (something the Wii sorely lacked). In my opinion, all Sony had to do was to price the system right, include a few great launch titles, and keep a steady stream of titles going. In a perfect world for Sony, they did that and now have marketshare close o that of the 3DS. But this isn't Sony's perfect world. It was Nintendo who did all of that, while Sony made the original launch price of the 3DS look like peanuts compared to that of the Vita and it's horrid memory cards.
Simply put, it wasn't about who they targeted, they simply failed to take advantage of any of the opportunities afforded to it. Launching a system at $250, and that without an essential memory card - which would raise costs to as much as $350 without even a game, cost them dearly. They never really recovered from that, and unlike Nintendo, didn't have the Pokemon's and Mario's to fall back on.
It's funny to think, Sony had an advantage no other company had before, Nintendo was, for the first time, actually struggling with their handheld, the market was wide open and Sony blew it. All they had to do was launch the Vita at $170 with a game and memory card included, and we would see a much more competitive market today. Instead, they chose to do what Sony does best: overprice the crap out of everything. And as we all know, Nintendo did what Sony didn't, and the sales speak or themselves.
Just my 2 cents on the matter. And with that, go Nintendo!
PS: to anyone even thinking about suggesting a phone/Vita hybrid, they already tried that and failed.... miserably. It didn't work then, and it sure as heck won't work now.
The greatest enemy of knowledge is not ignorance, its the illusion of knowledge
