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Despite troubles, Sony sees life in the PlayStation Vita

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The obituaries started for the PlayStation Vita before the device even went on sale in the U.S. Some critics called it "overly expensive." Others noted the odds of a dedicated game system succeeding in a smartphone world were formidable.

Three and a half months down the road, those critics haven't let up -- even as Vita sales have topped 1.8 million. And it's not hard to see why.

At its pre-E3 press conference, Sony promised 60 new Vita games this year, but only took the time to showcase three of them. Critics pounced on the company's perceived lack of interest in the system, which continues to struggle tremendously in Japan. And Sony didn't do much to help their cause by focusing attention on mobile phone gaming with the 'PlayStation Mobile' initiative.

But Sony remains upbeat about the Vita — incredibly so, in fact. The company says it expects to sell 10 million units this fiscal year (which ends March 31, 2013), largely on the strength of a holiday lineup headlined by PlayStation All Stars: Battle Royale, Assassin's Creed III: Liberation, and Call of Duty: Black Ops Declassified.

Sony officials channel the mantra that the handheld business, like the console business, is a marathon, not a sprint, and that a system doesn't have to break day one records to be a success in the long run.

"In this industry, you can't get too high or too low, because it moves very quickly," says Jack Tretton, president and CEO of Sony Computer Entertainment America. "I think there's an acceptable number - and that 1.8 million we've sold: That's acceptable. If it was triple that, I'd be happier. If it was one-third, I'd be disappointed."

[Related: Sony executives give up performance bonuses]

Even analysts who were skeptical about the Vita around its launch are starting to become fans of the system. Billy Pidgeon, senior analyst at M2 Research, was uncertain about the odds of the Vita (and the 3DS) on the eve of the systems' launch.

Today, though, he sees potential.

"It's performing per my expectations, but those are a bit lower," he says. "It will have a decent base but what I'm looking for is for Sony to be able to sell more software per unit. I think, to me, that would be a metric of success. … I think they're doing well on the fighting. They're getting up to speed on shooters. And another thing that makes me positive about it is some unique stuff, like Sound Shapes and Gravity Rush, which is really Sony's strength."

Moving software is ultimately the goal of the Vita. Hardware, even when it's sold at a profit, isn't a big money maker for game companies. But the royalties that come from software sales can be substantial.

Pidgeon says he'd like to see Sony selling two or three games per year to Vita owners, along with two or three downloadable goods. Tretton approaches software a bit differently.

"We've done consumer studies [that found] when there are five game [potential buyers] want, they're going to go out and buy a dedicated device. … Of those 40 Vita games that are currently available, 1.8 million people more than found their five games."

That's not to say it's all smooth sailing for the Vita. Scott Rohde, Sony's VP of Product Development and Worldwide Studios, admits he would have preferred to space out the initial batch of titles (25 hit shelves during the system's launch.) And some people continue to grumble about the price, though Sony says it has no plans to reduce that soon.

[Related: Hands-on with Sony's 'Wonderbook']

But Sony notes that even the PlayStation 3 survived a bumpy start -- and while that system isn't the king of the console hill like the PS2 was in the previous generation, it's still an incredibly popular and profitable device. Sony expects that to be true of the Vita as well.

"Anything with great rewards is going to come with great challenges," says Tretton. "We felt if the tech was there, and the game support was there, then the audience would be there. … I feel much better about it now than I did four months ago."

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