Is the Japanese gaming industry in crisis? (BBC article)

[TheSource]

Alot of misinformation in here...

1) If you look at Console HW, Console SW, Cellphone games, MMOs, Social Games, Retail PC games, advertising supported freeware, digitally distributed games, and whatever else, than Japanese developers are definitely seeing their share shrink.

2) Without Wii the development community would be in alot more trouble. PS2 (600m) Xbox (100m) combined as a market was a 600m third party market from 2000-2005, vs. PS3 X360 which is a 600m third party market. That may sound ok, but there needed to be huge growth to offset the increase in development costs. Wii added another 300m third party market to that 600m...

3) Which means GC --> Wii was the big winner in third pary support. A 120m ish third party market over six years became a 300m third party market in four years with maybe a 10-20% increase in dev costs.  PS2 --> PS3 was the big loser. The 600m PS2 market in five years became a 350m market in four years (120m to 87m per year) as development costs doubled. Xbox --> X360 has doubled as a sw market, in line with the increase in dev costs, which is why X360 support was stable from Xbox and now increased over Xbox in the last two to three years. To those saying third party games don't sell on Nintendo systems - that not true strictly speaking. Nintendo usually takes 55% share in the first three years, but if the console is popular enough that share rapidly shrinks and third parties can knock Nintendo down to 30-40%, in line with Sega on Genesis or Sony on PS1. When a Nintendo system gets to big enough volumes it becomes impossible for third party software not to sell. Wii is going to end up selling at least 500m third party games lifetime, which is $10 billion dollars for them. You can say the ratio of third party games to total sw on Wii is far lower, and thats true, but the sheer numbers show third party games do sell on Wii in huge quantities.

4) The Japanese industry has been in trouble for a while now on the console side. PS2 had 20-something million sellers (GC had one), PS1 had 30-something (N64 had eight or something), SNES had 20-something, and NES had 42. Top level software has been in decline for a while now. What worries me is they can't afford to have flops any more because people are buying fewer games even as costs increase. One more increase in costs and the companies are in big trouble if the software market doesn't increase. Everyone kind of knows that, which is why digital is the new gold rush.