My hypothesis is that the system was way too powerful (with a high bar to reach set by Sony's studios) to be just a handheld machine, and way too weak to be the console port machine.
A confluence of clusterfuck if you will.
So in some ways, it begged the question of "If I'm not going to take advantage of this system, why am I making a game for it instead of PSP/3DS, and if I am, why not just make a console title?"
With it having no install base at launch by definition, that sounds quite plausible.
I honestly am not sure. Based on the PSP's turnaround I thought Sony would be able to get more support than they did. I am guessing that Sony really hurt itself by launching a year after 3DS. I suspect Nintendo was very aggressive and had a lot of clout with third parties based on the DS and 3rd parties largely chose what they saw as more of a sure bet and a system that was going to be on the market sooner.
Right, in many ways the 3DS was the successor to the DS that could run what everyone was making on PSP as well, and had almost a year of headway and an aggressive price drop, so why support the system that isn't nearly as likely to take off in the same way and offers no tangible benefit if you don't need the hardware power?
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Well, let's compare some of this to the current state of the Wii U. I'll throw in a bit myself as well.
On the one hand, the Wii U definitely did not launch late relative to the other platforms given that it's likely a year ahead of them. On the other hand, it's not really setting the charts on fire in any region, so it is unlikely to have a large install base advantage over competitors by the time they come out, thus not offering all the potential advantages of launching early either.
On the second hand, the Wii U is about equivalent to the PS3. While it doesn't really raise the standard, it also doesn't make porting over to it child's play. We have publicly heard many complaints about moving an Xbox 360/PlayStation 3 game to the system, but unless I have forgotten (and correct me if I'm wrong), we haven't heard anyone complain about the difficulties of getting their PSP series onto the 3DS. Also of note, the top end bar the Wii U sets, while not moved, is still very high. To make the highest end Wii U game possible, you must compete with Resident Evil 6, Ground Zeroes, The Last of Us, Halo 4, and Assassin's Creed 3. To make the highest end 3DS game possible, you have to compete with Resident Evil: Revelations and Kingdom Hearts 3D, which while not simple, is much more attainable. As a final impact of being basically equivalent, the Wii U does not offer an immediately obvious benefit to developers who are hoping to sell their games by making them look better/shinier, which is something the 3DS offered despite being a relatively modest boost from the PSP era.
On the third hand (we'll return that to the morgue later), we have the historical audience. I feel the DS (in Japan) was never really seen as a system that did not have core games, but more so as one that had many core games, but lacked some as they simply would not work on the system. We saw attempts to get series like Resident Evil and Phantasy Star on the system, but ultimately they were horrific, and thus series like Monster Hunter didn't follow. This didn't stop things like Atlus titles, niche adventure games, Kingdom Hearts, or a large amount of Final Fantasy entries from showing up however. So, when the 3DS came around, these titles started showing up on the system right from its announcement, thus removing the biggest advantage the PSP had over the DS and helping to gut the Vita. With the Wii, there were some games that were blocked by technical issues, but there were others that certainly could have happened. There was nothing stopping a Kingdom Hearts spin-off or a Resident Evil game like Revelations from showing up outside of publishers simply not finding it an interesting proposition. Publishers haven't notably implied that they see the Wii U as the successor to the PS3 + Wii audience in the way they did with the 3DS and the DS + PSP, which doesn't bode as well for its line-up. Two of the biggest third party series on the system, which currently aren't many, are Dragon Quest and Monster Hunter, both series that are serving as continuations of their audience from the Wii.
Finally, and I don't have proof of this, but I feel developers thought the 3DS could potentially do well worldwide given the success of the DS, while the PSP signified that PlayStation handhelds were in significant decline outside of Japan. The PS3 is still at least moderately healthy in every region, while the Wii was fairly dead going into the Wii U. Even in Japan, there are still a notable amount of big potential hits coming out on the PS3, indicating that there is still interest for console games from the PlayStation audience, while the Wii has been dead for a long time. If you had to bet your company's console future on the successor to one of these horses, in the same way that publishers may have had to choose between supporting the Vita or the 3DS, which would you choose?
Personally I feel the situation doesn't look as bleak as it did for the Vita, since clearly it doesn't have all the same ties to potential disaster, but there's also not much giving me overwhelming confidence in its ability to hook third parties.
Edit:
While not addressed at me neccesarily ever since vitas big reveal I said it wouldnt do well. I said this because Sony doubled down on the same stupid strategy that got them into the initial disaster with PSP and PS3. Only difference being they lost a lot of confidence from 3rd parties and DS creamed it. On top of that no major system selling games were ever anounced.
With wii u they implemented the same strategy that they did with 3ds and I expect similar results, prior to price cut + MH, although consoles do worse than handhelds. I also didn't see 3DS quite as doomed even prior to the price cut + MH due to mk, ac, pokemon, nsmb all hitting the system inevitably much like wii u will have some system selling games that save it from being too bad. Although I have much less confidence in their ability to do a 3DS turn around simply because they don't have a pokemon/mh level title to do something drastic
Certainly anyone can answer. I didn't mean to imply otherwise.
But yeah, you're looking at this from the perspective of a consumer and coming to this conclusion. Ultimately, companies have to make the same kind of choices, and have to do it very far out in order to get games out in the first year.
Anyone who looked at the 3DS's announced line-up as of E3 2010 could see a fair number of large titles that would help build an audience for their game in one to two years. Can the same be said about the showings from Nintendo at E3 2011 or E3 2012 for the Wii U?