Of course Japan matters, it's the second largest gaming territory.
I think the problem is it seems only Nintendo know how to be successful in Japan, and I mean, really successful. You can't question the amazing DS sales, but what really astounds me is the software sales. The Brain trainings, New Super Mario Bros, Animal Crossing, MArio Kart DS, POkemon etc all have 4 mil + sales in Japan, an attach rate in excess of 20%.
My reckoning is Japan is potentially just as big as America in terms of sales potential, but only Nintendo know how to hit the market and get the best sales.
And if for nothing else, Japanese developers like to be able to release their games to success in their home territory. I can hardly imagine like Square, SEGA, namco, Capcom, Konami etc ignoring a market which makes so much revenue for them.
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