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"Even now, the PS3 sales are dropping off in Japan, which doesn't bode well for the PS3's future prospects"

?? Lets remember, 2 months ago the PS2 sold 10k per week in Japan. The Wii was outselling it 7:1 for some weeks. Then came the white PS3 a couple of japan-targeted games and we had a month where they outsold the Wii. Now they are at 35-40k per week without any big games coming out. Next year will see MGS4, Devil may Cry 4, Gran Turismo, Final Fantasy XIII so I do not think that the future prospects of the PS3 in Japan are bad .