PS Vita Bumped to 2012—Your Move, Nintendo

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It’s a decision sure to thrill Nintendo: Sony says its upcoming PlayStation Vita uber-gaming handheld won’t make it to the U.S. or U.K. this year after all, though it may still launch in Japan, as planned. Yep, all those rumors floating about in the wake of the Japanese earthquake and tsunami about the device missing its planned international 2011 release have been confirmed, though it sounds like the problem’s actually related to the games, not the hardware.

In fact Sony president Kazuo Hirai shrewdly sidestepped characterizing the bump as a delay at all, instead talking up software preparedness—apparently the Vita’s launch catalogue isn’t up to snuff yet, and we all know (ahem, Nintendo 3DS) what happens when your launch games stink.

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But call a spade a spade: It’s a serious delay, and a clear setback for Sony, already facing stiff holiday competition from Nintendo’s 3DS. The Vita—often described as tantamount to a totable PlayStation 3—may be the most important device Sony’s launched since the PlayStation 2. As outfits like Sony grapple with the advent of mass mobile gaming on Android and iOS devices, handhelds like the Vita stand to become more important than set-top consoles. In fact it’s not beyond the pale to consider that the Vita could, if it catches on, become the heir apparent to the PS3 in lieu of another set-top device, e.g. the so-called “PlayStation 4.”

Whatever the case, missing 2011 leaves the field open for Nintendo, whose 3DS handheld launched in the U.S. in late March for $250 and quickly sold millions of units, though it’s since fallen shy of Nintendo’s sales expectations. Nintendo’s reaction to sluggish sales this summer: an unprecedented price cut—from $250 to $170, effective August 12th. And while the 3DS’s games have been ho-hum, the handheld’s big guns (Super Mario, Mario Kart, Star Fox, Kid Icarus) roll out already this holiday. Without the PS Vita to distract, gamers (and especially parents buying for younger players) stand to snap up the 3DS in droves.

And of course there’s Apple’s so-called “iPhone 5” (probably launching in September or October) as well as the ballooning Android market to think about. For instance, a recent poll suggested three-quarters of Verizon customers have foregone the iPhone 4 in anticipation of the iPhone 5. Demand for smartphones in tandem with a surging phone-based gaming trend could knock both Sony and Nintendo out of orbit.

Don’t forget pricing. The PS Vita’s priced dear, expected to sell for $300 with 3G and $250 without. Given the unanticipated release timeframe setback, would Sony consider a PS Vita price drop to entice post-holiday gamers?

Nope, says Sony’s Hirai, who argues the device is jam-packed with unique features and “very affordable” for what it offers. He adds: “There is no need to lower the price just because somebody else that happens to be in the video game business decided that they were going to lower their price.”

Well okay, if you say so Sony (because pricing had no impact on sluggish PS3 adoption rates).

Whatever happens, with U.S. and European holiday 2011 sales officially out the window, the PS Vita’s already uphill battle just got significantly steeper.

MORE: E3 2011: Sony’s New 3D Monitor, $249 ‘Vita’ Handheld, ‘Uncharted 3’ Gameplay

Matt Peckham is a reporter at TIME. Find him on Twitter at @mattpeckham or on Facebook. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.