Sony’s PS Vita roars back to life

Sony PlayStation Vita Analysis

Sony’s (SNE) PlayStation Vita, a powerful but pricey portable console, had an awful year in 2012. In its home market, the Vita has often dipped below 10,000 units per week, getting outsold by as much as 10-to-1 by Nintendo’s (NTDOY) 3DS. In the week of March 3rd, Sony finally bit the bullet and cut the price of the Vita under 20,000 yen, or about $215. That sliced just 20% off from the Wi-Fi version launch price. Nevertheless, the sales of the Vita rocketed from 11,000 units to 62,000 units. This in itself wasn’t a sign that Vita has a future; price cuts often give doomed devices a short sales spike. But in the week of March 10th, something fairly magical happened: Vita unit sales stayed above 60,000 units and a new Soul Sacrifice game sold more than 100,000 copies.

Having a game top the 100,000 weekly sales mark in Japan is a major achievement for Vita. It’s a sign that the console price cut did not just jack up hardware sales but is also giving Vita software a badly needed boost. “Tales of Hearts” also sold a surprisingly solid 55,000 units during the week of March 10th, helping the Vita edge out Nintendo’s 3DS in hardware sales.

Sony engineered the sequence of the Vita’s hardware price cut and the debut of two hot games in the following week masterfully. There is no guarantee that Vita is going to maintain momentum into the summer, but Sony has now demonstrated that it can match the 3DS in hardware sales in Japan and deliver two solid software hits in a single week.

Over the coming weeks, Nintendo is going to hit back hard — the new “Luigi’s Mansion” game for 3DS already has strong buzz and a glowing review from Famitsu. It will no doubt give the 3DS a substantial hardware sales advantage after it debuts.

But Sony’s feat this month may have given Japanese software developers a reason to reconsider their resource allocation. Japan is rapidly becoming a portable console market as Nintendo’s Wii U continues to stumble badly; both the 3DS and the Vita outsold the brand new Wii U by sixfold over the past week. Vita may not be able to challenge the 3DS as the most desirable haven for third-party games, but it might be able to gain developer support at the expense of Nintendo’s tottering home console franchise.

Sony has started implementing Vita price cuts also in the US market, with a new bundle priced at $200. It will be very interesting to see how that influences American console sales, particularly if the Wii U continues underperforming.

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