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Sephiran said:

But if Nintendo has managed to buck the trend in that specific market, and getting a bigger slice of the pie, that just means that third parties and Sony are doing something wrong, and Nintendo is doing some things right. After all, while Final Fantasy has declined massively over the years in Japan, Pokemon or even Pikmin has grown. There was nothing preventing third parties from not suffering a massive decline in Japan. What happened was that Japanese third parties placed all their bets on Sony and Playstation, so when Playstation declined in Japan, they all declined together with Playstation in the Japanese market.

I want to regurgitate the fact that its almost impossible to find any market that buys as much console hardware as the Japanese market, on a per capita basis. That means if one states that Japan is a declining market for consoles, then we don't really have any good market for consoles left in the world.

And that can still equate to a market decline. Market declines often have reasons, they're not anomalies without explanation. As far as explanations go, that is also why I wrote

"Was it just that not enough developers were making titles for Japans preferred platform or has tastes shifted in such a way where the market is in dominated by only select few titles etc."

The qualitative analysis is honestly a lot to to get into but ultimately a discussion in itself. If Japanese taste has skewed in a way where they are loosing interesting in most gaming outside of Nintendo, or developers have skewed their games in a way where they are loosing japanese gamers, that is still a decline in interest. If only a select few third parties can break 1m, that reflects a decline from where we were. How easily that can be reversed (if it needs reversing), is an interesting question.