JAPAN Still does count but not like it use to japan is now# 3 in consoles worldwide

Japan is becoming more of a handheld country. In that sphere, they're still dominating.

Look at the demographics of the population, its growth (or lack of), and its economic standing (it is advanced). There isn't a lot of room for growth there. Contrast that with China, India or Eastern Europe (and Russia) and you have markets that are growing. Japan is relevant from a cultural influence, but not as much from sales numbers.

Japanese developers, however, will always be a factor in the industry, worldwide. Sony, Capcom, Konami, Namco, SquareEnix and especially Nintendo, who makes the biggest selling games in every country's market.

Just because Japan's sales are down, Japanese influence in gaming isn't going anywhere.

Well, there's many reasons why Japan is still a region aside from Others and NA.

1) Because Sony and Nintendo are japanese companies, so some of their games are relocalized, which made an interesting market.

2) Handheld is very strong in Japan. DS is nearly 21 million.

3) They put it because it's a really different market that acts like no other.

If you see the trend... NA love shooters, Others love sport games, Japan love games from Japanese creators.

Over 16 million consoles have been sold in the region this generation. Only one other single country has a larger install base than that, and its America. Further, if you count handhelds, it is well over 60 million total hardware in the region. Now if 60 million is no longer a factor, then everything but America isn't a factor haha. Japan is still a vibrant market in both the hardware and software markets. Although the growth in the American and mainly European markets seem to be overshadowing it, it's not like Japan no longer is worthwhile.

I think a lot if just has to deal with that lack of growth because it's already a well-established gaming country, more so than any other country in the world. So as everything else gets bigger, it is really hard for it to grow in comparison. But doesn't mean it isn't still a big market which it is. I mean let's not forget that the biggest release in the entire UK was MW2 which has done about 3.1-3.2 million (not sure if it is still behind Brain Training or not thought), which New Super Mario Bros Wii has destroyed in no time whatsoever and that isn't even close to its highest potential sales. Point is, the people there are heavily game oriented and when you release the right game, they'll eat it up at larger percentages to userbase than any other terrirtory.

Japan is relavent because as the home of two of the three hardware manufacturers and multiple major development studios and publishers, the actions of Japanese game buyers have a significant impact on world wide gaming trends.

Japan is #2, Europe is not a country.  The thing that makes it seems small is that the interest of Japanese gamers can be so different from western games, Europe and North America will largely buy the same games. 

Pretty much this.  The best selling games worldwide still come from Japan too (albeit almost entirely from Nintendo).  Actually, subdividing worldwide sales this gen by region of development (JP vs NA vs EU) would be pretty interesting if someone had the time...

In Japan it is still helpful for the PSP. Look at PSP sales in Japan vs other countries. The PSP would be literally dead in the water if it weren't for Japan.

While the PS3 lags behind the Wii, it has helped the 360 and PS3 gap shrink even further. As others stated the PS3 would not come close to the 360 without Japan. In others the PS3 has gathered some steam but that I think will change come fall with Natal and price cuts/bundles.