" the Vita becomes a purely digital device within the next few years." ...  naww really?.. you think sony would actually consider this after their 'trial' at digital-only psp-go that went really well ? o-wait

At this rate, highly doubt it.

When was its bill of materials $160 (for the $299 model), January? Being made mostly of quite standard components, very similar to those we can fnd in a smartphone, their cost should have already dropped a few tens $. So it should be a few $ profitable now, even without adding a memory card and a game. Then there is to consider that the biggest costs, initial investments, have already been paid. Were the console not profitable overall, keeping on producing it would just increase losses, but once it became profitable, selling it as long as it's possible, even in small volumes, is the only way to recover part or all of the investments. Surely it makes more sense for Sony to keep on selling PSV than keeping on selling at a loss TVs in the middle and low range, where it struggles to compete alone, and only recently finally accepted the situation and started a joint venture with former archrival Panasonic.

This said, Sony should moneyhat, if necessary, Capcom for a Monster Hunter main title on PSV, maybe preceded by an appetizing MH port to avoid wasting the main title when HW base is still too small.

You are talking about two different things: stopping selling at a loss, that already happened, and recovering the initial losses, that can only happen later, obviously, but that if you stop selling when sales become profitable, can NEVER happen. Once the product stops selling at a loss, keeping on selling it as long as it's possible and viable is the only way to recover losses or at least reduce them.

Obviously not, even if they did it as soon as PSV sales in Japan dropped, it would take some time, and if Ninty did it before (Did it? is current de facto exclusive due just to Capcom will or did Ninty pay them?), it will have received at least a one year exclusive from launch, I can't see Ninty spending its money for anything less.

They're advertising also here in Italy, both on football fields and on TV during those horrible sports programs broadcasted after football matches, where unbearable windbags endlessly blather about the matches and the football market, being paid for what old geezers always do for free in the bars. This too, though, makes more likely that Sony will keep on selling PSV, as the marketing money has been already paid, so stopping selling would mean losing it for nothing.

ROTFL! Right, what was I thinking?    

For advertising:

The Vita takes the main spot at the UEFA Champions League as well. This is probably the biggest sports event you can find in Europe, maybe even the world. It is head to head with the superbowl.

And the vita is also sponsoring the German Bundesliga on sky. Much smaller than Champions League of course, but the combination of Italian, English and German football + the Champions League is pretty massive and NOT cheap.

I don't take much stock in BoM and neither should you!!! The 3DS was given a BoM around $100 when it first released and was bleeding money when the price was cut to $170(it started profiting 5 months after that); showing BoM is not what it's cracked up to be.  What we do know is that Kaz himself said that the Vita hardware won't be profitable until 3 years after that (when it had better software expectations it could be longer now).  That's the official announcement and until Kaz or any high ranking Sony official says otherwise should be authentic statement (not some neogaf poster). 

Hey VGKing I guess you are in the minority about the Vita's future viability.

best analysis in this thread so far...great job Rol!!