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Sony to strike gold with PS Vita - if it cuts the price

Analyst says success comes for less than $200

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Sony may shift more than $2.2bn worth of PlayStation Vita handheld consoles - some 12.4m units - by the end of 2012, it has been forecast. The catch: the price has to come down under $200.

The prediction comes from market watcher Strategy Analytics, which reckons the gadget could revive Sony's fortunes.

That $2.2bn figure represents a year on year increase sales of $1.2bn for Sony's Consumer Products & Services group, based on an average sale price to retail of $180. But the Vita's real benefit, SA reckons, will come through big content sales.

"The PlayStation Store will have a vital role in selling games, videos and other content through its online access," said senior SA analyst Jia Wu. "We believe that Vita will cause Sony’s 2012 portable console software revenue to grow by $800 million compared with 2011.

Sony is in a strong position, says Wu. Rivals Apple and Samsung have no games-centric brand or console business to leverage, as Sony does with the PS3. While Microsoft does have a console business, with the Xbox 360 and Xbox Live, it lacks a series mobile gaming device. Window Phone is tied to Xbox Live, but like the smartphone and tablet platforms from Apple, Samsung and others, it's not a mobile platform synonymous with games.

Still, it all hinges on Sony's ability to attract a broad audience to the platform, and it won't find that easy if it's not very smart with its pricing, Wu said. In short, it has to compete with low-cost products like Amazon's $199 Kindle Fire.

"Sales of the Wi-Fi version of PlayStation Vita at $249 initially exploded in Japan, selling more than 300,000 units in the first week of release. But the new console is barely moving 20,000 units per week in its home market after all the hard-core fans made their purchases, mirroring the experience of the Nintendo 3DS."

Wu reckons North American and European sales to show the same pattern: the fans plough in at the start and then sales slump. That, he says, suggests "a price cut will be essential to stimulate sales and forge a competitive position". ®

Watch out for Reg Hardware's PS Vita hardware and games review special on Monday

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