News Article

Pachter: Sony Won't Make Money on the PlayStation Vita

Posted by Sammy Barker

Analyst goes hard on the handheld market

Outspoken industry analyst Michael Pachter doesn’t believe that Sony has much of a chance of making money on the PlayStation Vita. Speaking on the latest episode of the Pach-Attack, the Wedbush Securities employee described the system as a “joke”, explaining that while it’s a capable device, very few people want to buy one at the current price point.

“The Vita’s a wonderful, wonderful, wonderful piece of hardware, but nobody owns one,” he said. “The reason that they don’t own one is because it’s too good. It does too much, and developers aren’t making games for it because the market is too small. You need a big install base before you get third-party developers embracing a platform, and [that’s not going to happen on the Vita] at the current price point.”

Pachter added that the system’s caught in a vicious cycle. “If you don’t have software, then [no one’s] going to buy the Vita. But if [people don’t own the Vita], then you’re not going to get software. So, the Vita sucks. Sony has no prayer of making money on the Vita.”

The suit continued that while the handheld’s confirmed interoperability with the PlayStation 4 is impressive, it’s not going to encourage consumers to splash out on the device. “The handheld market is just not as big as it used to be,” he concluded. “[Sony’s] going to have trouble selling five million units a year [...] and nobody makes money selling five million units a year.”

Since its price cut last month, the Vita’s position in Japan has improved. However, its situation still seems grim in the west, with very few titles in the pipeline and hardware sales reportedly in the gutter. Despite this, the platform holder has ruled out a change in strategy overseas, opting to stick with the console’s $249.99 base price in North America.

[via gametrailers.com]

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User Comments (27)

NathanUC

#1

NathanUC said:

Hey guys, I don't know but I think Pachter might be bias. Crazy.. I know right?

KALofKRYPTON

#2

KALofKRYPTON said:

He must have missed the slew of inde dev's aiming software for the system. And of course, all of the people who do have a Vita.
There are of course valid points here. It is expensive, and there aren't a huge a mount of games, but there are plenty to be had.

get2sammybAdmin

#3

get2sammyb said:

I think he's right. The Vita is an awesome device, but we can't avoid the fact that it's not getting adopted as widely as it probably should be, and the problems he cites are pretty much bang on.

I absolutely love my Vita, but I'm not sure what the solution is anymore. Even a price drop won't work without the software to back it up.

Lionhart

#4

Lionhart said:

It's officially time for Mr. Pachter to go home and retire. The man has long last lost all grasp upon reality and common sense. The PS Vita does not suck and neither does the Nintendo 3DS. I own both the Nintendo 3DS and Sony PS Vita and I enjoy both immensely. Of course the 3DS has a lot more momentum but with games like Murasma Reborn, Dragon's Crown, Killzone Mercenary, Tearaway, Guacamalee and Secret Ponchos on the way things are definitely looking great for the PS Vita.

moomoo

#5

moomoo said:

He's correct. Although I'm the sure the Vita is, or at the very least for skeptics will be, a device worth having, Sony isn't going to make money on it.

@Lionhart There's a difference between saying something sucks and something is unproffitable. Pachter distinguishes between the two, and pretty well. He simply states Sony won't make money on the system, not that it's a horrible device (he even says it is a "wonderful, wonderful, wonderful piece of hardware, but nobody owns one).

FullbringIchigo

#6

FullbringIchigo said:

what pachter talking bad about a sony product......SHOCK

but i do agree with him on one point this one:

Pachter added that the system’s caught in a vicious cycle. “If you don’t have software, then [no one’s] going to buy the Vita. But if [people don’t own the Vita], then you’re not going to get software."

still that's the only thing i agree with him on because usually he just talks bull ****

Lionhart

#7

Lionhart said:

@Moomoo, Well he is right on the part in regards to Sony not supporting the PS Vita in regards to software but I sincerely believe that Sony will remedy that problem this year. I remember when the haters and critics were downing the PSP and prophesying doom but in the end the PSP held it's own. I think that Sony also needs to cut the prices of the proprietary memory cards and that alone will be a much needed boost to the PS Vita.

charlesnarles

#8

charlesnarles said:

Uh, yeah... aren't there "100 Vita games coming out this year"? Games are no longer software?? Is this article from last year?

brendon987

#9

brendon987 said:

Pachter stated a few month ago, that Sony could not afford to drop the price of the Vita in USA, as they are already sold just under cost.

Nintendo lost alot off money last Fin year on selling 3ds, below cost. With the knowledge that they should make the money back this year.

Sony is not in a position to do this.

Instead they offer great plus content. Cross buy. Getting the indies on board. An there alot off games on the VITA, its just missing regular AAA games releases.

Sony in for the long haul. An this year looking alot better then last year.

hamispink

#11

hamispink said:

The indie games will be bought up in droves by the current vita owners, many of whom are starved for new games (I'm still in the having WAY too many games to play position after the sales). The problem is that ports of these small games aren't going to drive sales for most consumers. The vita needs some big name games, which will hopefully be coming from Japan in greater numbers with the recent price drop.

Squiggle55

#12

Squiggle55 said:

All this talk about 100 games coming to the Vita this year. I hope they aren't including PSM in that figure. If there are really 100 PSN and retail games coming to Vita this year they would be wise to start announcing some of them to keep up some positive momentum.

But if Sony really and truly plays their cards right with remote play I still think the PS4 can be the Vita system seller.

jaydb1982

#13

jaydb1982 said:

Patcher is an idiot. Pure and simple. Spouts irrelevant and pointless opinions he has heard elsewhere as if they are gospel cause the words seeped through his lips. Patcher shut up, get a real job and leave gaming to the customers and game players who make thier own unbiased opinions.

AceSpadeS

#15

AceSpadeS said:

Because when he said this about the 3DS during it's slow period after launch he turned out to be oh so right. Nobody is making games for, or buying, that dead system.

RudysaurusRex

#16

RudysaurusRex said:

This guy is usually an idiot, but the lack of games on the Vita is killing it. Weak launch titles, and not many good ones on the way. I really wanted to like the Vita, and don't get me wrong, it is a good system, but it is dying.

BornOfEvil

#17

BornOfEvil said:

@RudyBelmont People have been saying that since July, and it's still here. It's getting a lot of good games this year(Soul Sacrifice, Tearaway, Killzone: Mercenary, etc.) and because it's just got it's second wind in Japan, we should be seeing a lot of games from overseas as well.

Paranoimia

#19

Paranoimia said:

The problem with Pach is that he's like the boy who cried wolf... he's come out with so much bullpoopy over the years that even when he does say something that is or might be true, I just don't give a duck.

moomoo

#20

moomoo said:

@TheRealBatman
Dying doesn't mean dead. There's no way Sony can outright abandon the system. They've put way too much R&D into it to just give up.
Thing is, in the end they're barely going to make a profit on it if things turn around, unless if a new franchise appears exclusively on the system and has Monster Hunter/Dragon Quest levels of appeal.
You've also got to keep in mind that a handful of quality isn't enough to move the kind of units the Vita needs to be successful. I can think of only 5 exclusive games coming this year to Vita with high production values and amounts of depth with Killzone, Tearaway, Valhalla Knights 3, Soul Sacrifice, and Ys: Celceta. That's not going to be enough, especially when their direct competition (which is eating at Sony's potential market share) has ten titles slated throughout the course of this year alone, not counting third parties. And three of them are Pokemon games. I'm not going to argue the quality on some of them (Pokemon Mystery Dungeon and Brain Training aren't the best things in the world) but the fact of the matter is that the amount of muscle Nintendo is putting behind their product is obliterating what Sony is putting into theirs, which does not bode well for the Vita.

@AceSpadeS That was before Nintendo announced a price drop. With Nintendo's record with not dropping the price of their systems so soon after launch, it'd be a pretty hard thing to predict, especially considering that his job is to make predictions based on past and current market trends. There's no way the 3DS would be doing as well as it is now if Nintendo didn't take a third of the price away from the system.

Oh, and can someone please explain how Pachter is incorrect so often? The guy makes hundreds of predictions and is consistently right with most, with only a few being off (Borderlands was a major one). When it comes to some of his others, they make sense. Wii HD, from a business perspective, would have been a wise thing for Nintendo to do, since they could maintain the high market share they once had in 2008. They have since lost most of it; they now sit at around $13 a share, where at one time they sat pretty at over $80. For the majority of the ones he got wrong, it would have been hard to predict the way they came out, since his job is to analyze the positions of companies/the industry as a whole based on past and current trends. I wouldn't want to pay a guy to speculate stuff for me if his predictions were thrown around without looking around at what has happened before.

AVahne

#22

AVahne said:

Uhm...no. The reason it's not selling is because there weren't enough games worth buying it for (which is finally being fixed this year) and because the essentially required memory cards are just too overpriced. Not just expensive, but overpriced for what they offer. There's also a lack of color options. This thing is a handheld console; it's a personal gaming machine, so people will want it in a color they want. This is being fixed in Japan, but so far most western regions are just stuck with black. And personally I believe Sony products look far better in white than they do in black.
Sony: bring more color options to the market, cut the price of your memory cards AT LEAST by half (if I can buy 3-4 32 GB SD cards with massively superior speeds to your own 32 card for the same price, then there's a huge problem), and drop the price of your Vita hardware to $200. You'll start seeing more sales if you do. You finally have the games, now make sure people will want to spend the money on the hardware to play them.
And remember, and this is to everyone, whether you agree or not, phones and tablets ARE encroaching on handheld console territory. Especially this year, when we'll be getting tablets and phones packed SoCs that blow away what's inside the Vita for the same price. Content, gameplay, and value-wise the games those devices play may not match what we get on 3DS or Vita, but things will just get better for those devices. That shouldn't be ignored.
But yeah, who else wants a price drop on the Vita and memory cards? More colors as well?

AVahne

#23

AVahne said:

@moomoo
Well the thing is, whenever Pachter makes a negative prediction, you're supposed to read it as the opposite of what he's saying.
So, with Pachter saying Sony negative things about the Vita, the Vita will be just fine.

Zodiak13

#24

Zodiak13 said:

I see the Vita being a niche market for the most part. I guess the price thing is a issue, but the lack of games is astonishing. The memory cost is rediculous, and yes color options do matter. That is something that Nintendo has also not done well w/ the 3ds lines in my opinion.

rjejr

#25

rjejr said:

Sony needs a wifi only $199 Vita 2 that replaces the memory card slot with Micro SD and works perfectly as a PS4 controller.

DevilMayDante

#26

DevilMayDante said:

Really wished I owned a Vita, only games so far that I want to play is the Uncharted game on it! Really sure it will get some great titles. Tempted to pick up a PSP just for the variety of turn based JRPG's. Problem is, no store sells them new where I live.

Scrible

#27

Scrible said:

Cell phones have the mobile market on lock down, why pay 300 for a portable system when you have a300 dollar or more phone, I'll never buy the vita, and people i know that have, are looking to get rid of it but can't, even at a lower price, why do you think Microsoft hasn't come out with a handheld unit, it's a loss of you do

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