Apparently, Sony (NYSE: SNE) hasn't gotten the message that Nintendo (OTC: NTDOY) is sending that the portable handheld gaming market really isn't what it used to be.
Ignoring the fact that the only way that Nintendo is able to boost sales is through massive price cuts, Sony is charging forward with its own "next generation" machine, the PlayStation Vita. The handheld will debut on Dec. 17 in Japan, while those in the U.S. and Europe will have to wait until next year.
The system will launch alongside 26 titles, compared to the eight that accompanied Nintendo's 3DS at launch. It will come in Wi-Fi and 3G flavors, with stateside service provided by AT&T (NYSE: T). The Wi-Fi model will start at the same price point where the 3DS started: $249. Sony clearly missed fellow Fool Rick Munarriz's article on why the Vita is doomed, since yesterday's announcement addressed none of his legitimate concerns.
The most glaring transgression is the price tag. A $249 price point is unjustifiably high in this era of mobile gaming. Mobile gaming no longer means having a dedicated portable gaming system to lug around in addition to your smartphone and/or tablet. It means having immersive games available to play on your smartphone and/or tablet.
Fortunately, the other big player in console gaming, Microsoft (Nasdaq: MSFT), has picked up on these clues. The Redmond, Wash. giant had previously hoped to enter the handheld gaming market many years ago with a project codenamed "Origami," but wisely affirmed at this year's E3 Expo in June that it does not plan on entering the embattled market, questioning its viability. Instead, the company will focus on strengthening its Windows Phone 7 offerings.
Sony and Nintendo are stuck in their old ways, leading both companies to put up lackluster numbers recently. Sony's recent quarterly revenue dropped 10% while operating income fell 59%. I'm with Rick on this one: PlayStation Vita will fail.
Fool contributor Evan Niu owns shares of AT&T, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Microsoft. Motley Fool newsletter services have recommended buying shares of Microsoft, Nintendo, and AT&T, as well as creating a bull call spread position in 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.
