It should come as no shock that the PlayStation Vita, which is nearing its first full year of release is struggling. While there was great hype leading up to the powerful handheld’s release from an excited consumer and lots of developer support, things quickly became derailed. It’s true that the PS Vita launched at a lower price than many had anticipated but the price still remains an obstacle for a device that caters only to the hard core, due to its form factor that makes it a conscious decision to carry around, versus say your smartphone that easily slips into your pocket.
Mix that with the fact that, soon after the PS Vita’s release, Nintendo slashed the price of the 3DS by nearly half where before, it loomed much closer to the PS Vita’s price point. With Nintendo’s rich history in handhelds and now a much lower price point for the 3DS, those itching for a new portable gaming system gravitated towards the 3DS while the average consumer was satisfied with playing mobile games on their iPhone which continues to get more and more powerful with each release.

And so, the great Catch 22 had begun for Sony. While publishers were quite enthusiastic about the PS Vita which boasted a powerful processor and GPU and consumers were quite satisfied with its new UI, as sales fell, so did publisher support. Publishers of course have little reason to support a device that garners a small market share while consumers have little reason to buy a gaming console that offers only a small library of support. So nearly a year later, how can Sony break the cycle and get consumers and publishers on board again?

Simple: by offering a price cut. Now I’m not the first to suggest this and nor is this idea original. However, what many tend to miss is that prices are created based on manufacturing costs and its not as if Sony is making a $250 profit on each unit sold. In fact, for the first four to five years of its life, Sony lost a big chunk of money on each PlayStation 3 unit sold. So what has changed in the last year that would allow Sony to drop the price of the Vita?