This Handheld Is Getting a Second Wind

Will the launch of the PS4 be enough to bring the PS Vita back from its sales abbyss?

Jan 5, 2014 at 11:00AM

Sony's (NYSE:SNE) recent PlayStation 4 launch has boosted its portable PS Vita gaming system's sales due to the handheld's compatibility with the new console. This much-needed increase comes after two years of lackluster consumer interest despite overall positive hardware reviews.

Vita's new uses
PS Vita sales increased a reported 68% the week the PS4 launched and another 65% the following week. The Vita interacts with the PS4 through a remote play function. This allows gamers to pause games played on the PS4 and resume them on the Vita so they can continue playing their games away from the couch and console.

The Vita can also be used as a second screen that enhances gameplay for certain PS4 titles. The second screen function can act as a radar, map, playbook, or whatever the game developer thinks that consumers would enjoy.

Microsoft's (NASDAQ:MSFT) Xbox One also offers a second screen through SmartGlass. Like the Xbox One, SmartGlass has been pitched as a multimedia product in addition to its gaming capabilities. Users can connect their tablet, smartphone, or PC to control their console and interact with TV shows, movies, and games.

The PS Vita is a key difference between the two consoles. The Vita makes remote play for the PS4 possible, an important feature that the Xbox One seems to be missing. The recent increase in Vita sales shows that gamers value the enhancements that the handheld brings to the PS4.

Vita history
Since its release, the Vita has sold roughly 6.9 million units, a figure significantly lower than its predecessor, the PlayStation Portable, which sold over 80 million units in its lifetime. It's also well behind Nintendo's (NASDAQOTH:NTDOY) 3DS models, which have sold a combined 40 million units. The lack of consumer interest is surprising considering that the Vita is a solid handheld device with a good library of games.

The Vita is powerful enough to run PlayStation 3 caliber games like Killzone: Mercenary and comes with a vibrant OLED touchscreen. Its catalogue of games include Uncharted: Golden Abyss, Rayman Origins, and LittleBigPlanet PS Vita, all of which have Metacritic scores of over 80. While these are considered good games, it's apparent that consumers do not view them as "must haves."

The Vita's top sellers, Uncharted, Assassin's Creed, and Call of Duty, are adaptations of games that can be purchased for the PS3 and don't inspire people to buy the system like other popular handheld games. Nintendo's new Pokémon X/Y is only available for its handheld system and is estimated to have sold over 8 million units since its release in October. Four weeks after the release of the new Pokémon game, Nintendo reported that sales of 3DS systems increased 135%. This type of immensely popular handheld exclusive game is what the Vita lacks.

Obviously, Pokémon is a special franchise that has been one of Nintendo's crown jewels and cannot simply be recreated for the Vita or any other system. If the creative talent working for Sony were to focus on creating a Vita-exclusive game, though, I think that they could come up with something that would get gamers to open their wallets and purchase the handheld even if they don't own a PS4.

Final Foolish thoughts
After struggling for two years, the PS Vita's sales have picked up as the PS4 gives consumers another reason to buy the system. The handheld gives the console a competitive advantage over the Xbox One with remote play in addition to acting as a second screen. The Vita shows signs of getting a second wind, but still needs a popular exclusive game title if it wants to be a successful handheld system.

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Ben Popkin has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

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Jun 12, 2015 at 5:01PM

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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