Sony has announced that it has sold 1.8 million PlayStation Vita handhelds during the last fiscal year, which for Sony ended on March 31st. During a recent earnings call, Sony CEO Kaz Hirai admitted that while it was a good start, its software and services must be strengthened.

Hirai’s comments echo what we have been saying all along, which is that the lack of software is hurting the Vita; and when you combine this with pressure from smartphone gaming, it is really making it difficult for Sony to sell the Vita.

Sony looks to stay the course with the Vita, but the lack of major software titles from the premier studios is a problem that isn’t going to go away. While the publishers/studios want to see more units sold before making the investment in developing more titles for the Vita, Sony needs publishers/developers to develop more software to sell more units. It is the traditional chicken vs. the egg problem.

Analysts we spoke to don’t see any signs of help coming for the Vita in the short term in the way of an avalanche of software coming for the Vita. As one analyst told us, “It is going to take the sales of more units to really get publishers and developers engaged in the development of more titles, and that isn’t going to happen without the sales of more units.”

A director at a major software studio told us, “We are watching the sales of the Vita and while we would like to develop titles for it, Sony just has not sold enough of them yet for us to be sure that we could recoup our development costs. We continue to monitor the sales, and if sales continue to climb, then we would be open to releasing our titles for the Vita, as well, but it would have to make financial sense.”

It will be interesting to see if Sony has any additional success in rallying more support behind the Vita in the way of additional software development. We suspect that Vita’s software release schedule to be announced at E3 will really tell the story of where the handheld is going for the rest of this year.