With sales in Japan going back to sub 10K soonish, I believe Sony has 3 options with the vita.
- Strip it down and make it essentially an expensive, $99, PS4 accessory. This option would not do well IMO
- Kill it by March 2014. I.e. ship whatever they are gonna ship this FY and by May 2014, when they give out their FY report, state that the vita project is no more
- Relaunch it with 16/32GB embedded internal memory, hdmi out, tablet, phone SKUs, redesigned store along with app, ebook, mp3 stores, price drop by at least $50, MC price drop by ~50% while introducing 64 and 128GB MCs, and a whole bunch of new games. They would also need to relaunch PSM at the same time as well
If I were Kaz Hirai I would go with the 2nd option to be honest.