It's a good sized market, significant enough in the big picture. It's more important, however, because of its high concentration of developers. Winning that audience and wooing its developers can be very influential worldwide. Think about this (unlikely) scenario: Sony and MS ignore Japan for a year, Nintendo launches a slew of big games and new IPs and takes over the market, selling 15-20 million Wii U's. Sony's lack of Japanese focus results in a small market share less, than 5 million. Konami makes Metal Gear Solid 6, Square makes Final Fantasy XVI and Namco makes Tales of Spurgeonryan. Are they going to release these popular-in-Japan titles only on a system with a small Japanese footprint? The answer is no, even if worldwide it is a commanding leader. If a system is big in Japan AND elsewhere they may even only make it on that system, like Square tried with DQX. But you need a Japanese presence to get the support of key developers like Square, Konami, Capcom, Namco and others. That's why it's important.