UPDATE 1-Sony sees brisk sales of new handheld games device

Tue Jun 7, 2011 7:22pm EDT

* Expects profits from handheld hardware in under 3 years

* Sees Vita launch in other markets by next March (Adds details on new device, analyst comment, background and byline)

By Isabel Reynolds

LOS ANGELES, June 7 (Reuters) - Sony Corp (SNE.N) <6758.T expects its new PlayStation Vita handheld games device to sell faster than its predecessor, despite the explosive growth of mobile gaming on smartphones and tablets.

"If we were able to hit that 70 million mark for PlayStation Portable, we want to exceed that both in terms of numbers and timing to get to that number," Sony's No. 2 executive Kazuo Hirai said in an interview on Tuesday on the sidelines of the E3 games convention in Los Angeles.

Sony's Vita comes as more and more people use smartphones and tablets to play games on the go. Apple Inc's (AAPL.O) online gaming network, accessed through its iPhone and other mobile devices, now boasts of 50 million users.

But despite the competition, Sony's Hirai said the aim is to make a profit on hardware sales of the new handheld PlayStation Vita in less than three years.

That contrasts with the PlayStation 3 home console, which analysts say initially cost the company hundreds of dollars per unit to sell and took years to make a profit after launching in 2006.

Jay Defibaugh, an analyst at MF Global, said Sony's Vita could outsell the PlayStation Portable.

"I think it's definitely possible, although I don't model that right now, given the bigger emphasis on connectivity," he said. "All things considered, the handheld market has more exposure to the increasing popularity of smartphone-based gaming."

In a separate interview, the head of Sony Computer Entertainment's U.S. division, Jack Tretton, said the Vita would go on sale in Japan by the end of the year, while launches in some regions could be pushed into 2012.

Sony, which revealed the pricing for Vita at a flashy event featuring sports and rock stars, is already facing criticism the gadget is too expensive.

Vita's pricing -- $249, or $299 for a 3G mobile version -- would help Sony reach its goal of making money off the device in less than three years, however.

"That's in line with what they've been saying about not making losses on the scale of the PS3, which was losing them hundreds of dollars per unit at first," Defibaugh said, adding it was unclear how Sony was calculating profitability on the device. (Reporting by Isabel Reynolds; editing by Bernard Orr and Andre Grenon)