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Kyuu said:

1. Monster Hunter declined as have virtually all major 3rd party games including Dragon Quest and certainly Final Fantasy, and the vast majority of A/AA games. Nintendo's first party games on the other hand kept climbing, it's an utter monopoly. Rise barely or moderately outselling World in Japan isn't really a feat when you consider portability and the massive popularity/install base gap between PS4 and Switch. MHRise will not achieve the numbers of Portable 3rd, which came out on a system not nearly as popular as the Switch. The series definitely declined in Japan despite the insane growth in the rest of the world. But thankfully the decline isn't as severe as Final Fantasy or Resident Evil or Gran Turismo, etc. It does seem to have the potential to bounce back if released on Playstation and Switch simultaneously (Dragon Quest couldn't with XI).

I agree with your general point that Nintendo's software have increased their influence among the japanese audience while big franchises from third-parties have overall weakened their pull which is at the base of the current situation extremely lopsided in Nintendo's favour (even more so than what happened in the past).

However I think it's naive to take the peak point of a series to determine its current health without considering if that peak could be easily attainable in the future or if the special circustances around which happened made it unlikely to repeat the phenomenon with the same intensity with the sequels.

For example no one should fault a Super Mario Bros. or Pokemon sequel because it couldn't reach the peak of the original Super Mario Bros. or Pokemon Red/Green.

While Monster Hunter Rise won't match MHP3 it could still sell in total >4M units which is, historically, an extremely high threshold for a third-party game in Japan (something achieved only by 3 Monster Hunter, 2 Dragon Quest, 1 Final Fantasy and more recently Minecraft when combining the various versions *).

The situation with the Dragon Quest franchise warrant a special discussion due to how it was handled in the recent past.

DQXI was initially planned as a PS4 exclusive, only later a custom made 3DS SKU was put in development due to Square Enix fearing PS4 couldn't guarantee the sales expected from the franchise in Japan.

Two years later SE released the director cut of DQXI for Switch.

If we combine all the three SKUs, DQXI has sold at the same level expected from a mainline Dragon Quest game (usually DQ games sell around 3-4 million units in Japan).

Obviously never before SE had to resort to create three different SKUs to manage a new mainline Dragon Quest game but this was forced onto them by initially thinking they could get away by only supporting the PS4.

The bizarre thing about DQ is that, while in the last few years we witnessed the rise of a new dominant platform in Japan therefore a prime candidate to receive the support from a huge japanese centric franchise like DQ, the release of new DQ games (mainline, remakes, spin off) dropped to zero since mid/late 2019.

Dragon Quest Builder 2 on NSW/PS4 released in December 2018 (sold the most on NSW) and DQXIS launched in September 2019 (it's currently at 700K at retail) were the last "new" DQ games released on Switch (or any other console for that matter) until now.

This is a big oversight in Square Enix's planning for the franchise.

* Also Yo-kai Watch 2 if we'd aggregate the third version.