Smart phones are obviously to blame, but they won't last forever. PCs didn't last forever, arcades didn't last forever, and consoles won't last forever either, but neither will tablets or phones. Games will though, and the companies that make them can also last through the trends if they catch on soon enough, or better yet, if they set them. I agree that Microsoft is a non-factor in Japan's market, and Sony probably will try to maintain the status quo with a super powerful, super expensive PS5, so I have a feeling it'll be up to Nintendo to adapt. The QoL thing sounds promising for Japan's aging population, and the supposed Fusion console should help with the AAA development cost bubble that's just waiting to burst any time now. I don't know if it'll be enough though.
As for tablets and phones, I see that market crashing soon enough. It resembles the gaming industry before the first big crash. Easy accessibility and low standards of quality results in a market flooded with crap. Add in the fact that consumer's attention spans on phones tend to mean IPs become irrelevant very quickly, and the anti consumer practices in a lot of free-to-play or play-to-win games, and you end up with a recipe for disaster. The market is only doing well now because everyone has a phone, most of the games are free, and development costs are nil. Just watch, when Flappy Bird comes back with multiplayer, it'll bomb. Candy Crush Saga will start earning more money from lawsuits over the word candy than actual sales. Sending an IP to mobile is a death sentence, and a market like that is unstable and unsustainable.
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