How big can PS4 be in Japan?

[Kresnik]

About the same as PS3, ~ 10 million.

Gamers already migrated to handhelds last generation and they're further transitioning to smartphones this generation. Home consoles are going to struggle.

Getting the announcements of Final Fantasy XV and Metal Gear Solid 5 in there early is a good start. Sony need to get in there early with a couple of announcements of their own (Hot Shots Golf; Gran Turismo) which will help, and maybe a new monster hunting IP/extension of Soul Sacrifice or Freedom Wars. Something from Japan Studio, in any case.

As long as the rest of the 'important' franchises show up eventually - Resident Evil; Yakuza; Tales; Dynasty Warriors; Gundam etc., then it'll be okay. And apparently One Piece, too.

The otaku developers - Gust; Nippon Ichi; Compile Heart; Idea Factory etc. will show up sooner or later - Compile Heart have already confirmed they're working on a PS4 game.

Throw in the fact that certain western franchises are getting bigger in Japan - GTA; CoD etc., and the fact that I suspect we're not going to see the same level of early-in-the-gen exclusive moneyhatting from Microsoft, and that'll be enough to offset the threat from handheld/smartphone gaming but not enough to increase sales.

I'm also working on the assumption that again Japan is going to gravitate to Sony over Microsoft, as they did in the current generation.