Yesterday's announcement makes perfect sense. The PS3 and PS4 are both too expensive for developing markets. The PS2 is too outdated. Markets like China need a sub 100$ home entertainment system with online functionality that matches smartphones. If Sony executes this properly, VitaTV could capture that market segment and make some serious money.
With that said, there are some major drawbacks:
a) Expensive memory cards
Since Sony seems hell bent on avoiding SD cards, the only thing left for them to do is drop the price of the proprietary memory cards to comparable levels. I doubt they will however.
b) Controller input inconsistency
VitaTV's greatest weakness is that it derives from a massively stupid design, the PSVita. Who the hell needs 2 touchscreens? Why on earth would you make a portable with fewer buttons than the DS3? This inconsistency will create confusion and I wait to see if Sony will manage to handle this properly. One solution would be for VitaTV + DS3 controls to become the lead platform for developers, and that is what I suspect.
If the Japanese electronics giant manages to address those issues above, VitaTV could become a huge success worldwide, perhaps even dwarf the PS4 in sales. In capitalism, price makes all the difference in the world. An ultra low cost home entertainment platform that comes with all the modern online/social functionality and bears the Playstation branding could have a massive impact in developing markets and beyond. With that said, I keep my reservations on whether Sony will manage to communicate their message properly to the markets.
What do you guys think?