Viva Vita: It's not too late to rescue Sony's handheld

There were quite a few things in Sony's final results for fiscal 2011/12 which raised eyebrows - not least of all the headline figure, a vast loss of ¥456.7 billion (around €4.4 billion) whose only redeeming feature is that it's not quite as high as the forecast made last month. Most of Sony's real losses originated in the Consumer Products and Services Division, which filed an enormous ¥229.8 billion operating loss. That's relevant to us, because along with LCD TVs, Vaio PCs and digital cameras, that division also houses Sony Computer Entertainment and the PlayStation business.

Away from the headline figures, though, it was an omission that really got eyebrows around the industry heading for the hairline. Sony, like most hardware manufacturers, generally tells the world how many units of hardware it sold in its financial results. That held true in today's financial figures, with the company confessing to dropping sales across the board - figures for everything the firm sells were down, including the figures for its three game platforms, the PS3, PSP and PS2.

"While the industry loves the Vita, consumers simply don't seem to care about it"

Wait... Three? Yes, in spite of the detail being provided elsewhere, none of which was particularly flattering (PS3 software sales were the sole bright point), the PlayStation Vita wasn't anywhere to be found in the report. That omission was corrected by Kaz Hirai on the earnings call a little while later, with the newly anointed company boss revealing that PS Vita sales sat at 1.8 million worldwide in March. The lack of figures in the report, however, was enough to draw attention to the struggling handheld, and has raised the question of the prospects for the device once again.

Speculation as to why Sony didn't simply cite Vita figures in its report is a fairly fruitless thing to engage in. 1.8 million by the year's end is a weak figure, significantly behind the 3DS at a comparable point in its life (ahead of the steep price cut), but it's more likely that Sony simply didn't want to include a system only launched last December in a table of year-on-year comparisons than that it thought it could hide poor sales by leaving them out of the report. Vita is Sony's latest device and the focus of intense interest from the industry and media alike. Nobody was ever going to flick through Sony's presentation slides and just forget that Vita existed. Information like that simply doesn't hide or slip by quietly in the internet age.

Regardless of motive, Vita's figures are out there now, and they're dismal. The console seems to be in a very peculiar place in terms of its market position. Unlike the 3DS, which was widely derided at its launch, with every two-bit pundit having a view on why it was destined for miserable failure, the Vita seems to be genuinely well-liked. I've yet to speak to anyone, within the industry or outside it, who has a strong view that says that the Vita is a poor system, or that its software line-up was disappointing (slow since launch, perhaps, but not disappointing overall). Yet the system is struggling to achieve even the modest success (and I'm really being kind there) which the 3DS enjoyed prior to its price cut.

Does that reflect a dangerous disconnection between the games industry and its consumers? While the industry loves the Vita, consumers simply don't seem to care about it. Viewed from certain angles, that's a fairly worrying situation - but then again, it's hardly the first time this has happened. Games industry types love underdogs and have a taste for the obscure. The Neo Geo, the Saturn, the WonderSwan, the Dreamcast, the GameCube - hell, even the original Xbox - all of them are consoles resoundingly rejected by the public but utterly embraced by those within the industry. Watch the eyes of any game developer or journalist (two species with more in common than they like to admit) light up when they find a truly obscure piece of failed game hardware in a Japanese second-hand emporium, and you'll see what I mean. It's not wrong or strange for creators and those most tightly engaged with a medium to root for underdogs, and it doesn't necessarily imply that they're out of touch with their consumers.

On the other hand, that's not a very reassuring idea for Sony, who would definitely rather that its new console didn't get added to a list of companions like the DreamCast or the WonderSwan. On that front, there's good news, and there's bad news.

The good news is that Nintendo has proven firmly that even in a post-iOS world, there's a market for dedicated handheld game consoles. Worldwide sales of the 3DS are poised to blast through 20 million (if they haven't already done so), which frankly, is far ahead of what even the most optimistic observers thought possible from the device's first year or so on the market. Apple's devices dwarf Nintendo's sales, of course, but Nintendo doesn't really care - if it can maintain and even grow its market even while all of us are carrying around game-capable iOS devices in our pockets, it'll be a happy (and profitable) company. A year ago, few people thought that was possible. Once again we've been reminded that you never, ever bet against Nintendo.

"E3 will be a rare chance to change the narrative - to stop us all from talking about how little Vita is selling, and get us all talking about how exciting the line-up is"

The bad news is that Sony isn't Nintendo. PlayStation has extraordinary brand recognition, but the rapid rise of Microsoft's Xbox 360 as a PlayStation competitor in the home market demonstrates just how precarious even a strong brand position can be - and in handheld gaming, PlayStation has never enjoyed the same sort of position it occupies in the home space. Moreover, Nintendo's strengths lie in different places - not so much in its own brand (although "Nintendo" is still a great company brand in itself) as in its character and game franchises. Sony simply doesn't have anything that competes with that, a fact which it has thrown into stark relief with its recent attempt to ape Nintendo's Super Smash Brothers franchise. Time and again, Nintendo can snatch victory from the jaws of defeat by rolling out a superb Mario or Zelda title, or dipping into the deep waters of its lesser (but still much-loved) franchises. Sony can't.

That's not to say that Vita can't pull itself out of this slump with some strategic (and truly excellent) software titles. More than anything else, that's exactly what the console needs - superb software that puts clear blue water between the capabilities of Vita and of 3DS, while also making the difference between Vita and iOS devices more clearly defined. That software needs to accomplish some difficult things. It needs to be a handheld title (not a home console title shoe-horned onto a smaller device, despite the dull refrain of "console quality!" we hear from so many publishers and developers), but one which leverages the power and capabilities of Vita to great effect. It needs to build fantastic word of mouth. And once Sony has one title that achieves that, it needs to repeat the success again. And again.

That's the kind of software we're going to be looking out for at E3 this year. Sony's press conference needs to be a Vita showcase of epic proportions. It needs to thrill and amaze us with the software it's got lined up for the new platform - to get fence-sitters like myself to actually get our wallets out and buy into the Vita dream. This is a rare chance to change the narrative - to stop us all from talking about how little Vita is selling, and get us all talking about how exciting the line-up is. A price-cut won't hurt, of course - it's probably essential - but even more than price cutting, that's how Nintendo pulled the 3DS out of the fire, and that's what Sony needs to do with Vita.