The entire industry in Japan seems to be in a real critical situation (excluding Nintendo). I'm just talking games for the Japanese market here, not games like MGS4 or RE5 which have world-wide appeal.
Their games sell like crap on Wii. Only DQ:Swords had decent numbers and it tanked very quickly. The game was terribly shallow though so it doesn't help either way.
3rd party games seem to sell better on PS3, but still like crap and then factor in the development costs of the HD graphics and you might as well be back on Wii.
PSP - Forget it, almost nothing sells there.
360 - Who?
DS - Here 3rd parties can actually make a profit, but still, few break-out games overall.
Necessity is the mother of invention and the Japan industry needs to desperately reinvent itself (Nintendo already has) or a lot of companies could vanish before this generation is out.
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