Irregardless of the current performance of PS3 and even 360, the Wii has been dropping year over year since launch. The price difference is also much closer in Japan than other markets.
Nintendo made a misstep with Wii Music and the unevoled Animal Crossing: City Folk - they failed to ignite or maintain interest in the Wii and there's no other significant software out to maintain the hardware sales.
I'm sure Nintendo expected better from Wii Music but with it flopping I do not think they can safely wait for Wii Sports Resort and Wii Motion plus to keep the Wii engine going. People are fickle and lose interest easily.
At this point, in this severe recession in Japan, with no software coming out in the next coming months, Nintendo should indeed drop the price or face the prospect of PS3 becoming the new darling of the masses.
Conversely, once June hits Wii will have WSR and then Monster Hunter 3 both of which should be huge boosts to sales but I'm not sure what PS3 has to counter those between now and FFXIII.
Should be an interesting year in Japan.
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