I hope so. Western devs aren't that interested in the handheld and the big Japanese developers habitually produce content on Nintendo.

I think they'll be out of handhelds for a cycle. I can imagine them coming out with something 5 years from now when they can make a fresh entry with some dramatically improved technology.

I think they're done with dedicated handhelds and we won't see anything from them which resembles a handheld gaming system for the next 4 years.

Western Third Parties are done supporting dedicated handhelds and it makes no sense for sony to divert resources away from PS4 and VR. Theres still hope for them in Japan but I don't think one market will be enough to cause them to act. I think at most we will see one more revision of the Vita to allow it to become an optimised streaming device (L2/R2+L3/R3)

I think Vita is a great piece of hardware, perhaps too good for handheld gaming. I have the first gen Vita, but I do not have any use for it normally, since PS4 is so superior. I only use Vita for remote play when travelling, and for that is is perfect.

My hope is that Sony will make a lower cost version from Vita and try to address more casual gaming. Especially since now they seem to be financially in a position to make choices here. I think that not doing first party games for Vita was more a decision dictated by financial situation rather than a choise to exit. Of course looking at sales of handhelds in general, it looks like phones are killing the handheld market.

Yes probably.

So prior to late 2004 (and the introduction of the PSP), what did the worldwide market for Japanese games look like? 

Hmmm that kind of reasoning really doesn't hold.  No financials? No sales numbers? Or is this just Rol's infinite wisdom?