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Kyuu said:

The Vita didn't fail to appeal to Playstation fans.. it failed to appeal to gamers at large. I bought and enjoyed all Playstation home consoles (bar out of stock station 5), and the PSP, which is the only Sony system I got at launch and still own to this day. Yet I didn't even consider getting a Vita, not because it was a handheld, but because its library just didn't quite do it for me. The general consensus shares my perception regardless how wrong we may all be, or how great Vita fans make it out to be.

You can change Playstation fans to Playstation customers I guess...

Anyway, we need to understand what games people want to play and how exactly the said people want to play. Maybe you misunderstood Switch success as a reflex of how big handheld market really is, but dedicated handheld market is not really that big. The Switch success comes mostly from its hybrid aspect and the consolidation of Nintendo software that used to be apart in a single SKU. 

The realistic ceiling for a handheld-only hardware in the market must be more in line with 3DS numbers i.e. ~75 million. It's a big market still, but we need to understand 3DS inherited DS userbase, they play the same games and most of DS franchises were present in 3DS. There is (big) a fandom, a group of consumers, who until 3DS only ever bought Nintendo as handheld manufacturer 

I don't think an equivalent group exists for Sony, or if they exist should be a very restrict in numbers. Sony customers, at mostly, play Playstation home consoles. All the software they want to play are on PS5 already. It means Playstation users at most aren't really waiting for next Sony handheld, there won't be as much excitement and loyal buyers as for a Nintendo's handheld. Early sales sometimes defines the faith of a hardware and this is very hard do turn around a bad sales trend

If Sony really wants to enter on handheld market again they will need to release something not only very cheap, but with a value proposition that is very hard to ignore. 

For instance, steam Handheld has the fact you can carry your already existing library that you could have built for more than a decade. If Sony smart-delivery your digital library from PS5 to PS5-Portable it maybe can hold similar value, but what about the physicals? We are also talking about console market, the purpose of console market is to sell hardware at loss and then recover with software sales and subscription, if Sony really delivery 100% of digital purchases from PS5 to PS5-Portable how much more software customers will need to buy to offset selling 2 hardwares at loss?