tagging this for a more in depth reply later

the decline started before that.  Saturn and N64 were far more successful than the xbox and gamecube.  If you don't  believe me that things are declining compare a software sales between the 2 gens, it's not even close.  For example N64 had 11 million sellers in Japan then GC has 3.  PS1 has 29 million sellers compared to ps2's 20.  Saturn had 1 million seller DC and xbox had none.  That's a huge decline.

I blame the economy, japanese arent as rich as they used to be when all these consoles were made up until 2003.

I think this generation will be better, most wii owners were mostly casuals the statistics say. So if both wiiu and ps4 sell 15 million units Lifetime it maybe is lower but the gaming library will have a lot more AAA quality titles produced in japan in comparison to last gen.

Its more of a cultural thing no?
Japan had a waning birthrate, lack of space, work dictates adult life, etc.

Plus it isnt like Japanese companies pushed for game marketing while the Western market has slapped video games on sides of buses, bus stops, tv adds, internet adds, etc.

This sounds more like the reality we live in when it comes to Japan, that and more and more Western devs became popular like Notch, Phil Fish and then there was the western indie boom from a few years ago, there are a few Japanese indie devs but nowhere near the number of western ones.

The mobile market also seems to have taken a more firm hold. The Japanese really favour convenience above all else, I can't see home consoles ever becoming a big part of Japan like they once were in the past, mobiles/tablets will be taking over more and more as time goes on and new technologies will emerge from Japan and elsewhere in the world that will just make it more convenient to use than a console.

Would like to hear Tachikoma's take on this, as both a Japanese native and a developer.

Don't forget the Japanese age ratios are out of whack.

I`d probably say the rise in mobile devices in Japan. Most people have smart phones and are usually on them, so there`s a huge market there for mobile games. Puzzles and Dragons was one of the bigger games people were playing, so more companies likely switched to mobile games to get into that market. Handhelds are also big with the kids, as many of them have portable devices to play any where they go, and with friends. That`s what it seems like to me.

I always love your analysis. I'll give this a proper read when I get home.

Thanks for the insight. I was really interested in your take on older generations being content on playing NES-PS2 games because after all these years (35 years old now), I finally realized that I no longer get the same enjoyment out of current gaming as I do playing games from the NES-PS2 generation and have started pouring money into my collection. My PS4 hasn't been played in months, yet my Genesis and SNES are now daily.

Maybe I belong in Japan? lol