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How is the combined hardware chart is going?
I would bet software is declining because hardware is too.
The switch and ps4 price point is not like 3ds and vita.
Maybe the market just need a sub 200$(equivalent in yens) system.

I would also put in the account the price of the games. If Japan follows the western pricing, the games are an average of 50% more expensive. A decline in sales should be expected, don't?
Otherwise, the revenue seems to be higher.