I guess the question is why Nintendo can succeed but Sony can't. I don't think mario and pokemon are the answers.
Brand loyalty in Japan is strong, + ninty handhelds are always cheaper.
As far as Sony staying in the dedicated handheld market, quite frankly, the management of that company cannot continue to prop up money losing divisions or they will be replaced.
Further, you cannot extrapolate from their TV business what they will do with their handheld business. The TV sector has been given so much leeway and time because it employees so many Japanese people and they have invested so much into it. That is not the case with handhelds. Also, reading between the lines, if TV business is not profitable by end of FY14, they will begin winding it down.
Having said that, they may have a strategy wherein they try to roll their mobile PlayStation assets into something on android based tablets and smartphones. Or maybe they have discovered how to make a phone with sticks and buttons that people will actually want to be seen with. Who knows...