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Why the PS Vita Will Be Sony's Last Handheld

Many gamers and investors likely believe Sony will kill off the PS Vita soon.

The handheld console has only sold 8.8 million units since launching in December 2011 -- considerably less than Nintendo 's 3DS, which has sold 44 million units, or its predecessor, the PSP, which sold 80.8 million units. The PS Vita was also absent from all of Sony's major press conferences this year, which were dominated by news about the PS4 .

. Source: Take-Two.

Grand Theft Auto: Liberty City Stories

Take-Two and Capcom have not released any new GTA or Monster Hunter games for the PS Vita, and their absence is painfully obvious. The top five games for the PS Vita -- none of which were made by Take-Two or Capcom -- have sold fewer than 5 million copies combined.

Lastly, the rise of mobile games over the past four years has taken a bite out of handheld consoles. Research firm Gartner estimates that global revenue from mobile games will nearly double from $13.2 billion last year to $22 billion by 2015. At the same time, the value of the handheld market is expected to plunge from $18 billion to $12.4 billion.

Why the PS Vita doesn't fit into Sony's long-term strategy

Sony clearly believes that gaming in the future will revolve around a single game being played on multiple screens.

Remote Play allows PS3 and PS4 games to be streamed to a PSP, PS Vita, PS TV, and new Xperia Z devices. Cross Play allows certain games to be played on one platform, like the PS3, and resumed on another one, like the PS4. PS Now, Sony's beta-stage cloud gaming platform , streams older PlayStation games to the PS3, PS4, PS Vita, PS TV, and BRAVIA TVs.

PS Vita serves no real purpose within this ecosystem. It can be replaced by an Xperia Z phone connected to Dualshock controller, since Xperia devices can now locally stream PS4 games. Many of the games that Sony is promoting for the Vita, like Minecraft , are also available for Android devices. Xperia devices using Square Enix 's Dive In can even play Final Fantasy titles soon.

The Xperia Z could replace the PS Vita. Source: Sony.

Since Xperia devices can play mobile games, stream PS4 games, and will likely support PS Now in the near future, the next logical step is to allow Xperia devices to succeed the PS Vita. Sony's smartphones only account for 3% of the global smartphone market, but that's still a much bigger footprint than the PS Vita's niche of handheld gamers.

Eliminating the PS Vita will also allow Sony to promote Xperia devices and the PS4 together, which should boost the Xperia's brand's visibility while reducing marketing costs at the mobile division, which posted an operating loss last quarter.

A Foolish final word

In conclusion, I strongly believe the PS Vita will be Sony's last handheld. All of Sony's business strategies point to that inevitability, and it would make perfect sense to abandon the dying handheld market in favor of the growing smartphone one.

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The article Why the PS Vita Will Be Sony's Last Handheld originally appeared on Fool.com.

Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Take-Two Interactive. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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