The age of smartphones, inexpensive apps and free-to-play models are an undeniable challenge to portable game systems, a key Sony executive has said for the first time.
Shuhei Yoshida, the head of Sony Worldwide Studios, is one of the only high-profile games executives to publicly suggest that smartphone sales cannibalise the portable games business.
"I was asked during the Tokyo Game Show how badly this [mobile] hurts portable gaming consoles, and my answer was - quite. Quite badly. There's no question," Yoshida said in an interview with GamesIndustry International.
Slideshow: New PS Vita model
Senior games executives often shrug off the influence of mobile games. In July 2011, Nintendo president Satoru Iwata said mobiles have not hindered the popularity of portables. PlayStation America boss Jack Tretton, meanwhile, has previously said the premium experience of core games will shield it from the mobile business.
"If I open a movie theatre next door [to a theatre] and start charging 50 cents per ticket, but I'm showing you things I filmed with my camcorder, I don't think it's a threat to the theatre charging $13 per ticket," Tretton claimed.
"It's about people having reasonable expectations. I don't think we're training people to pay $5 for games. The cream always rises to the top."
Yoshida appears to have bucked the trend of executives publicly avoiding discussion on the influence of mobile games. When asked directly how much the mobile sector has challenged sales of Vita, he replied: "That's a really big part of it".
"The price point... We were very excited to be able to launch PS Vita for $250, that was our target pricing - under $300, because you have to buy a memory card. But people already own smartphones, right? They're paying lots of money to own smartphones - it's subsidised but they're paying back through a monthly subscription, two years of paying $80 every month, for example. That's a lot of money they're already spending.
"So for them, that's already committed - and in order for them to play games on a smartphone, incremental investment is almost zero. It's hard to compete with zero price, which is also why the free-to-play model makes sense for casual players."
The Vita's global sales performance is unclear - Sony now hides that specific data from investors. The system launched in December 2011 and, by July the next year, had sold about 2.2 million units.
Yoshida also stressed that mobile games was not the only contributing factor to Vita's disappointing sales performance.
"In terms of the installed base, compare it to 3DS - the 3DS is doing much better," he said.
In August Sony announced an official Vita price cut, one month before it was revealed that Sony was developing a lighter and less expensive model. The PlayStation business has yet to announce when it will ship the new Vita systems across Europe and the US.
"The new PS Vita is slimmer and lighter, easier to hold, has some internal memory from the get-go, so it's a bit more value," said Yoshida.
"But the important thing is to continue to provide great games and game experiences. The games can come not only from PS Vita's dedicated games - Vita and PS4 are designed with each other in mind, to connect to each other.
"If you own a PS4, you can play PS4 games via remote play, and once we start the Gaikai service, you'll be able to play PS3 games on PS Vita. We continue to add our services on PlayStation, and for PS Vita, the enjoyment and the sources of games will expand, not just from PS Vita dedicated games."