Japan is not gonna forget about the PS3, make no mistake.

[TheSource]

I don't buy it.

Five reasons:

1) 360 has graphically similar games, at a cheaper price point and is now starting to get some exclusives in Japan. It also seems to cost PS3 ~200k/year in sales which although only ~4k a week in Japan, adds up, when competing for money in a bad economy against portables with better line ups and consoles that are cheaper.

2) As has been stated, PSP never really sold poorly in Japan. I never agree with the usual PSP software assessment either - the software is and was doing fine, especially given the piracy. Portables always have lower sw:hw rates. DS is the exception in that the attach rate might get to ~6 or so in Japan. Game Boy, GBA, Game Gear, PSP, and even Lynx had 4:1 sw to hw rates.

3) Square-Enix is now platform agnostic. Thats a big deal because they are the one independent publisher that can break a platform's back in Japan or give it a sizable push. DS & PSP both have significant Square-Enix support. None of the consoles are likely to have a comparable number of exclusives. The one regional exclusive that remains, Final Fantasy XIII I think is roughly offset by Monster Hunter on Wii and the string of 360/PS3 multiplats and the developing 360 exclusives. Dragon Quest X is probably going to be on a Nintendo system given its almost impossible for DQIX to sell under 2m units on DS.

4) The Long Quiet Period. PS3 has a pretty quiet period coming up in Japan. Resident Evil 5 and Gran Turismo 5 are the most preordered games in Japan right now for PS3. Gt5 doesn't even have a release date in Japan. Wii has even fewer reserved games, but Wii Sports/Play/Fit, Mario Kart, Brawl and the occasional third party game, and the upcoming Wii Music & Wii Sports Resort will be enough in coming months for Japan. PS3 has only a few known quantities...Little Big Planet is going to be a cult classic in the same way some of Rare's games are/were but I don't think its a big hit in Japan. Afrika is similar. That leaves Trusty Bell as the main game with an eventual shot at 100k in Japan for the next few months though a few others have a shot at 50k.

5) Sony investors want Sony to be profitable, and if that comes at the expense of a cheaper PS3, so be it. But with the game situation as it is, the lack of price cut wiggle room is fairly dangerous.