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Safiir said:

Ok I think I've somewhat answered my question. So I've summed the sales of the top 50 games for 3ds and as far as Japan goes about 75% of those games are Nintendo games. Which is not so bad. Until you realize that out of those 25% 2/3 are Monster hunter games. Which really leaves less than 10% of the sales for 3rd party games. This is a really brutal competition for any 3rd party dev.

 

Edit: Just a disclaimer - I know this analysis is far from extensive and would love if someone does a better one.

Which is partly third parties' fault. They stopped making 3DS games, because obviously Nintendo never gets the benefit of the doubt ever, and decided to experiement with mobile and even Vita projects, even though Vita has less than 1/4 the marketshare. 

You can't build an ecosystem with variety if you're not getting any help from developers in doing so. 

Resident Evil Revelations sold about a million copies on the 3DS. So what does Capcom do? They make RE Revelations 2 for every major system BUT the 3DS. That is the idiotic logic that Japanese developers get bogged down in. Predictably RE Revelations 2 doesn't do so hot. Super Street Fighter IV also sold over a million copies on 3DS, did Capcom ever bother with any other fighter on the system? Nope. 

Square-Enix didn't even bother giving the 3DS a Final Fantasy branded game other than two music based games, you tell me if the Vita sold 20 million like the 3DS did that it would be treated like that. 

The big third party games that *are* on the 3DS and are original content tend to sell great. Monster Hunter is even expanding out its audience in the West on the 3DS and doing great in Japan. Yokai Watch has broken out big time as a huge hit in Japan, one of the biggest new IP that Japan has seen in ages. Dragon Quest continues to sell very on 3DS.