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VanceIX said:

My friend went on an internship to Japan this summer, and I'm planning on going either next summer or the one after. Pray tell me, how does noticing that the Japanese have smartphones and games on them (just like the rest of the world) make them any different?

Look, mobile games aren't much more popular there. The major publishers do make mobile games, yes, but those are hardly costly for them. Publishers like EA and Activision do the same thing here with mobile games and sell millions. Mobile games are cheap to make, you don't see console quality mobile games even in Japan, unless you consider ports like Final Fantasy or Monster Hunter. Major devs can easily make console games along with mobile games if they wanted to. There simply isn't a market for it anymore, and Sony/Nintendo are responsible for that.

I'll say it again: People in the west refuse to buy a Vita because of the lack of titles and support, with most decent titles being Japanese niche titles. Put that scenario with the PS4 in Japan and you'll understand what's happening.

How are you making this assumption? You are arguing with a guy that lives there.  Mobile gaming is huge in Japan and is probably the number 1 in revenue.

Why would SONY spend millions on making a game for the Japanese market when they can use that money to cater to the West? Western games are what appeal to everyone outside of Japan and allow for a  lot more profit and growth especially trying to compete with the Xbox One in the United States.

People are going to buy a PS4 when KH3 and FF15 come out andMS isn't even gonna try in Japan.

Console gaming is dieing in Japan and so is handhelds.