I think the japanese market of home consoles is weak (and tends to get weaker from now on) due to the way of life of the Japanese. Maybe my vision is way too stereotypic, but I've always been told they don't spend much time in their homes today, working almost all the time. The frenetic life of Japan makes impossible for people to take time, relax and enjoy a home console, so they choose the portable systems, which they can play anytime, anywhere. Besides, the game market in Japan has always been dominated by young people (I mean, ranging from 10 to 30 years old), and we know the population in there is getting old. Even though the Wii is directed more towards this part of the population, maybe it's not enough to convice the elders to play video games.
What else could affect the video game sales there?