The answer to this is not that complicated, most of the gamers who used to buy these games on consoles a while back are now on portable devices, XIII is no excuse because FFII didn't hurt the franchise despite it being viewed as one of the franchise's weaker games in fact sales increased with the next installment.
The question is not about the previous game hurting the brand it's more about why portables have become the dominant force, I hear culture in Japan has people moving around a lot which portables suit and given that portables in recent times are now starting to match consoles in the type of games in their libraries it becomes more clear why they're opting for portable devices.
As it goes any brand that is strictly rooted to a home console is on a path to decline in Japan as the problem is a platform one not a brand one.
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