Approaching three years of existence the PlayStation Vita finds itself in an undeniably precarious position, further complicated by the arrival of the PlayStation 4. Sony recently admitted to misjudging the mobile market, and while the handheld did manage to find a bump from the next-gen console’s arrival, the sustainability of that increase could be questioned. However even with little marketing, the Vita has managed to cultivate a cult audience in both owners and indie developers alike, the latter of which have flocked to the platform as a haven for their unique titles.

Wedbush Securities analyst Michael Pachter doesn’t see much hope in the PlayStation Vita, and believes that the handheld’s fate may already be sealed. The sales are horrible. Pachter bluntly told Game Informer. “Vita is a little bit too elegant and a little too expensive.”For the analyst it all comes down to the handheld playing host to unique and high-end experiences, something he says third-party developers and publishers are not interested in pursuing. “But then it has relatively few games because they are complicated to make and the market is so small. he explained.  Sony will spend the money with their internal studios, but you’re just going to see [Vita] die a slow, painful death.

Pachter then goes on to echo previous comments by PlayStation UK Marketing Director Fergal Gara, who confessed that the mobile market has shifted to multi-purpose devices. Where the two differ however is that Pachter also questions the viability of the Vita’s Remote-play capabilities, admitting that while the feature is “cool” it won’t necessarily translate into a financial success. “I think that most people who have competing concerns about the use of the console versus watching TV have their console on a different TV.”

That’s his opinion on the PlayStation Vita as it stands today, however it is important to understand Michael Pachter is an analyst and as such he programmed to think long-term. Unfortunately, his thoughts on Sony’s future in the handheld market don’t exactly paint a brighter picture. “There is no future and they couldn’t do any better [than Vita].” 

The reason he predicts such eventual doom for Sony handhelds is due to there being another big fish in the little pond of the modern handheld market. “I just think [Sony] misjudged the size of the market and launched it into this s—storm of mobile destroying the casual end of dedicated handhelds.” he disclosed. “And Nintendo’s not giving up much share on the hardcore side, because they have three games to every one Sony game, and they are good games.”

Regardless of how you feel regarding the PlayStation Vita, Pachter makes some valid points. The PlayStation Vita, on all counts, has not lived up to its potential and has in fact found itself in an identity crisis of sorts recently. However we aren’t so quick as to dispel the prospect of a turnaround just yet. Sony are taking great strides in making the handheld more accessible to developers, whether through direct partnerships or ones that are perhaps a bit more far reaching – such as their recent collaboration with Unity. Truth be told, we don’t exactly know what the future holds for Vita; but what we don’t see is “painful death” anywhere on the horizon.

  • ruefrak

    I learned two things from reading the interview with Michael Pachter:
    1. He’s kind of a jerk
    2. He’s not nearly as smart as he thinks he is.

    The Vita may not be racing up the charts, but does it need to? Does a product only deserve to exist if it sells millions and millions? If this niche product can make a profit for Sony and make a profit for the developers creating for it, then why would it die?

    • Himanshu Goel

      Totally Agreed. Obviously he doesn’t know what he’s talking about and from his statement on Nintendo games, I’d even say he’s biased (and obviously hasn’t tried the Vita)
      And he’s already spoken once on the Vita, why is he saying the same thing again? Looks like someone’s craving some attention…

      • coco_wolfie

        exactly. he said “You had Assassin’s Creed: Liberation, that cost Ubisoft a lot.” as though that was a bad thing, if you look up sales they sold 600,000 as of feb 2012, i wonder how many theyve sold now..? its like assassins creed is deservent of a big budget and it seems to have paid off

      • Terramax

        There’s probably an element of truth to him craving attention, but to be fair, it’s his job to analyse the game market, for which he will look at financial statistics of various game companies, viewing their expenditures, earnings, investments, etc, therefore, unless you happen to be in the same field as him, or in development of a big game company, I’m not sure I could hold your words that he doesn’t know what he’s talking about.

        I don’t see him as biased either. There’s no future career in someone whom puts favouratism over research. A sensationalist, yes. He will obviously sensationalise a story for more attention. But ‘biased’? No, I don’t think so. He’s been critical of just about all the major game companies at some point or another.

        • Himanshu Goel

          I say biased simply because he’s been saying the same thing about the Vita ever since the thing was announced. I don’t think he had any statistics back then to say anything about how the Vita would do. Also, how is ‘the device is too powerful’ a valid statistic? That’s just nonsense don’t you think?
          Also, the guy seems to never factor in the fact that there are people who still like specialized devices and that smartphone gaming isn’t necessarily hardcore gaming.

          • Terramax

            Even when the system was released, it was pretty easy to predict the console wouldn’t do well. I would list the reasons, but you know them as well as I do.

            And, of course, being too powerful makes complete sense. Being too powerful means being more expensive. Nintendo’ inferior handheld had to reduce its price because nobody was willing to pay it’s original RRP. Why would these same people pay even more for a Vita – a console with arguably less all-round appeal?

            Yeah, there are people that like specialised devices, but clearly these are a minority. Definitely not near enough to keep the Vita market alive.

            Bottom line is, he’s an analyser with years of experience. I’m not saying he knows everything, but when you’re being paid large sums of money in order to research and give advice on the gaming industry, as well as putting your thoughts on numerous major TV shows, I’m sure you ought to know a thing or two about the industry. The TV shows in question, including news networks. will certainly want evidence your advice is worth their time and money.

    • Exactly; the numbers may detract the bigger companies from investing, but if the platform is profitable and viable for other developers and continues to sell, then what’s the problem? To say that something that sold 4m is not a viable business model is disrespectful to the customers and the company itself.

      And if it’s 4.2m it sold, that’s better than:
      a) I thought
      b) Last year

      If the platform has sold more than last year, that would show that more people wanted it, no?

      • Terramax

        How is it disrespectful? 4 million units sold for an expensive unit that crowns itself the most powerful on the market, costs more to manufacture than the rest on the market, hence requires greater sales in order to so much as break-even, is really, really poor, no matter what angel one looks at it.

        Sorry to play devil’s advocate, and I know it’s all up in the air considering we have little in concrete facts to guide us as to how well both Sony and 3rd parties are doing with the vita market, but to be fair to Pachter, and anyone else with the same viewpoint, stating the Vita is a failure, financially, for large companies, is no stretch of the imagination.

        It’s not disrespectful. It’s just being realistic. I will continue to throw my money at the Vita, as it makes me happy,, but I’m under no misconceptions that the console is a complete disaster for Sony, something which even they’ve been frank about admitting. We can all like a console knowing the inevitable truth that the console is failing, and likely always will. Didn’t stop me loving the Dreamcast despite being announced dead on arrival.

    • Terramax

      “Approaching three years of existence the PlayStation Vita….” …… what? Are we talking 1 extra year in which it was in development?

      “The Vita may not be racing up the charts, but does it need to?”

      It needs to make a profit, which I’m assuming it’s not doing if there are
      few games, and they’re not selling well, so I’d say the answer is ‘yes’.

      “Does a product only deserve to exist if it sells millions and millions?” If
      it’s expensive to manufacture, that’s a resounding ‘yes’.

      ” If this niche product can make a profit for Sony and make a profit for the developers creating for it, then why would it die?”

      Well, only Sony know whether the console is making a profit, but I’m going to
      take an educated guess and say that, if the 3DS, which is the biggest
      selling console of last year, which is also cheaper to manufacture,
      isn’t enough to keep Nintendo’s head above water, there’s little chance
      the Vita is keeping its own for Sony.

      • aros

        The Wii U is destroying Nintendo, along with trying to adjust to HD development – they admit noone who works for them has even used PSN or Live and went into the Wii U generation as if the 360 and PS3 never happened. Without Wii U Nintendo would be profitable.

        • Terramax

          They’ve also gone on record to say that, despite the 3DS selling well, even that console isn’t selling well as much as they need it to. Even if you were to take the Wii U out of the equation, Nintendo would still be having trouble. Obviously not as much, but profits would be minimal.

  • XtemmA2

    oh, him? only as valid as weekly astrology.

  • Kurisu Makise

    I actually wouldn’t disagree with Pachter if the world == the west only. When PS4 struggles in Japan, then we’ll see if there’s no future or not. As for everyone jumping on the niche sales status, there’s also the Business opportunity cost to consider. Right now, because of PS3 and of course no doubt some R&D with PS4, having Vita as a profitable niche tier is fine but Sony as a whole company, just has too many products with not enough sales. It’d be far better at this point, if they just made a Vita variant of their tablet instead. Have maybe two or three tiers. A cheap end, if that can be sustained by not directly making it yourself, then two high tiers. One high tier for non-gamers (aka just being an Tablet) then the specialized gaming variant, aka a PlayStation tablet. I believe that could work out much better in the future for them. They could boot into their own OS for games and such, then boot into Android for apps, have backwards compatibility with Vita, while sustaining the Japanese market (and niche western ones). Of course the issue would still be pricing and such, as if they want any mainstream appeal with kids, you’re torn on price.

    • Terramax

      The 3DS is the embodiment of success in Japan (along with most of the West). Wasn’t enough to keep Nintendo, a much smaller company, out of the red. Gone are the days when a Japanese company can rely on Japan only, or predominantly, for sales. Japan is a big market – accumulating up to 20% last time I heard. But dominating 20% of the market isn’t even enough to stay afloat. Not when your console isn’t doing so well, or even bombing, in other parts in world. Not in this day and age.

      • aros

        I’m seeing this opinion a lot lately and it smacks of not understanding just what an abject failure Wii U is. Research what happened to developers (and the high profile casualties) during the switch to HD. Nintendo just ignored it without learning and ramping up and exactly what happened back then to everyone else is happening to them now. The Wii U is selling a LOT worse than Vita but there is no room to reduce price because of the tablet. Mario 3D World was the lowest selling Mario title to date.

        • Terramax

          Right now, it’s hard to imagine how any of the 3 companies are making enough profits to keep going in the long run. One is a toy manufacturer, and the other two are technological conglomerates where any sections of the business which are making any money are using it simply to pay off the sections that are burning it away.

          I guess, considering the ridiculous amount of money in their vaults at this time, Nintendo still remain the safest. Yeah, they’ve had 2 consecutive years of losses, but they’re not likely at the stage of mass layoffs, selling offices, or even sections of their businesses in order to stay afloat.

          It will be very interesting to see what Nintendo’s next move will be. More than likely they’ll keep on as usual, in the hope that the 3DS will sell well enough to keep the Wii U on life-support long enough before a big enough audience owns the system for it to come out of a coma and start making money again.

          Back to the Vita, to be honest, if the announcements this year so far are anything to come by, there isn’t much new to look forward to the system. It’s not that it hasn’t got a future. It’s just that it’s [near] future is just ports of some old PC games, and a few Japanese hunter games. :/

          Still, every other month, a game comes along that surprises me. And I’ll continue to buy games cheap in PSN sales to keep me happy. Regardless of everything I’ve said on this news topic, I’m actually optimistic that I, personally, have many more years of fun to be had with my Vita. I just don’t think it’s likely Sony will see anywhere near as much benefit with the system as they were hoping for. Then again, if it makes a good companion for the PS4, maybe they’ll reinvent the handheld somehow. Time will tell.

          • Kurisu Makise

            This year is supposed to be the year for Japanese games, y’know the ones people were hoping and praying to every God/Avatar known to man, for western release. That means Hunting-Action games, since that’s bread and butter, along with some other stuff. What Japan needs to do, in order for the West next year to get some more growth and sales, is to cover some other bases, like traditional RPG (instead of oversaturing the Dungeon RPG/Hunting Action) and get some Action games going on, ugh…Capcom’s lack of presence is just yikes. I mean I love the small devs but Vita is still missing some meat and potatoes from PSP.

  • coco_wolfie

    I would sure love to write him and sony an open letter on this.. I do agree its in some rough waters, but its getting there.. i dont ever think fans or anyone will abandon portable gamings ship, and i have so many ideas to help improve, i think if games like guaccamelee, terraria, even hotline miami would be amazing for retail even if theyre only £10, seriously a physical case will help so much! i remember when i bought mine and the only game that really interested me was rayman origins, its just the variety wasnt there.. i mean that would draw a lot of people! i also think having more customized vita’s would be nice, a tearaway designed vita would be so eyecatching. but yeah with all the pushes sony has i hope this doesnt bring them down and i hope someday someone does say hey if you do this it might help.. 🙂

  • Kyle Wakeling

    As I said on N4G, Pachter’s a moron who needs to be fired; his metrics for gauging the handheld market are all wrong.

    The Vita OLED model currently sells for an average of $180-$200 USD/CAD here in North America, and the parts that comprise it (if bought separately) cost around $160 at last check (which was January of 2012, so that could even be lower now). That means they’re making $20-$40 if they sold all Vitas to the stores at the same price as they’re sold for now (selling hardware to stores at the same price as they’re sold to the consumer is common practice for hardware).

    Then factor in the fact that PSVita owners buy 10 or more games (according to the last numbers, via E3 or Gamescom – I forget which) for their system on average – and they’re very easily making a profit off us, not even mentioning PS+.

    How can something that’s made millions in profit since launch (conservatively, $20 x 7 million consoles = $140 million, not accounting for price differences in other regions which are often higher than here) be a failure or doomed?

    This guy’s a moron – in the most literal sense of the word. Someone make him go away.

    • Himanshu Goel

      He’d even say that the LCD model costs too much. Sadly someone doesn’t see the difference between gaming on a smartphone (no matter how high-end) is just different from gaming on a device designed for gaming (not to mention touchscreen only vs physical controls)
      Oh and PS Now, it may be coming to smartphones and tablets but everyone knows that the Vita would work the best with it because of the physical controls and rear touchpad. Obviously this guy doesn’t follow this site (or any other Vita related site) to know how many games are in the works and how many are out, there’s a huge list here:
      http://wololo.net/talk/viewtopic.php?f=50&t=31448#p250175
      I don’t think that’s too little.

    • Terramax

      Regarding manufacturing costs, don’t you have to take into account other factors, like percentage of profits to the retailers, advertisement, maintenance of servers for games, online store, the cost of research and development before hand, and continuous for new models, etc

      Regarding 10 games sold, again, how much of this goes to Sony? And if most of these are cheap indie titles, are they really enough in the way of profits (if any) to compensate for the high maintenance of such an expensive tool?

      Where are you getting these figures from confirming the console is making a profit? I don’t suppose you have a link that I could have a look at?

      • Kyle Wakeling

        Well here’s the breakdown of cost; http://www.eurogamer.net/articles/2012-01-20-is-the-playstation-vita-worth-230

        My numbers are very conservative (I used the lowest possible profit numbers based on parts) and highly doubt they’ve put somewhere near $140 million into the console’s development given the fact that most of the parts can be found in other systems and R&D is shared between divisions. If this was Microsoft, they’d have paid much more given the fact that they’d have to develop from scratch, however the Vita is based off components used in other areas of their company’s products, so R&D is very much a shared cost.

        Regarding how games make them a profit, you know any game bought on the platform has a certain amount of money go to Sony right? (even if it’s third party). I believe the last estimate was $5-$8 for standard releases and more for exclusives. I’m sure it’s less for cheaply released indies, but they don’t do this stuff for free. (numbers from my head, but I’m sure if you check Forbes you’ll find I’m being quite fair).

        Regarding advertisement – what advertisement? You can skip that bit regarding the Vita as its negligible (obviously, seeing as how most people don’t know what a Vita is). Server maintenance and online are factors, but the PSVita uses only a small portion of the complete online package that Sony offers via the PSN (and a lot of games use local hosting for online games, not requiring servers). I’m sure that of that $140 million (conservative estimate, remember) you could chop $20 million off the top to cover anything the Vita has used regarding online costs – after all, you pay for your own internet separately.

        Any assumptions I’ve made are based on conservative numbers, giving the benefit of the doubt to the “worst case scenario” of all situations. I have no doubt they’re making a net profit on the Vita division.

        • Terramax

          Yes, I’m aware sales of all games have an element go to Sony. But if few games are being made, and the quantity of copies is minimal, there’s no telling if they’re really making enough.

          Frankly, I’m dubious as to whether the Vita really does make Sony a profit in the long run. If it were that viable, why aren’t they supporting all that much? I’m quite certain they’d be making it public and abundantly clear if it was. It’s completely at odds with the singing and dancing they’re doing over the success of the PS4.

      • aros

        Sony make at a very minimum the 30% that Apple do so yes, there is money on every sale.

        • Terramax

          That’s not a very good explanation.

  • Satu Patel

    He’s an analyst. He’s more than likely invested in the rivals like LG, Motorola, and other makers of the cell phones. He praises Apple highly so I’m sure he’s invested in that too.
    I’ve worked in the stock exchange. I know he thinks. He’s also blatant and thinks everyone has the latest and greatest like his son. I worked with brokers like that day in and day out who spoke their mind all day.
    Take his advise like a grain of salt.
    It’s people like him who said that GameStop will fail. They also said consoles are dead. GameStop reported a 22 billion dollar profit last earnings In 2013. Both consoles have sold and will sell very well.

  • aros

    Pachter is an idiot. He has been making ridiculous predictions for years now. If you throw enough darts at a crystal ball, some are going to stick and these are the ones he loves to bring up as an excuse for why his opinion is right. He predicted ps4 was going to be an utter failure because “the traditional console market is happy with their Apple device” showing he understands almost nothing about the market.

    • aros

      He might analyse figures but when you come to the conclusion the Wii U is selling poorly because people don’t want next gen consoles and as such PS4 will fail it shows you are lacking somewhat when it comes to critical faculties and suitability to do the job.