These are the weekly nextgen sales % in Japan.

1. Starting with the NES no system has won without winning Japan.

By looking at this chart it is obvious that the Wii is dominating Japan, and is getting progressively stonger as the weeks go by.

2. At the current rate of sales the Wii will most likely pass the XB360 in WW sales by the end of July. That is just around 8 months for the Wii and 20 months for XB360.

3. Cost to develope on the Wii is at least half the cost of the other two systems.

Why pay over twice the developement costs for a systems that will have a far smaller user base? Devs need to look at the likely ROI (return on investment) for their developement times and efforts, and realize that far greater returns can be made on the Wii. Yes they can make money on all systems, but a bunch more on the Wii.

4. The Wii is the only system that can reach and likely beat PS1/PS2 user base.

PS3 and XB360 are far to expensive to hit a mass market price like $100, but this is possible for the Wii.

So what do you think is the best way for third parties to go?

Like in all walks of life things change, Japan is becoming less important. Its population is getting smaller while other nations are catching up to it economically. USA pop is growing the gamer market is also growing, while more nations join the Eu and gain economic benefits thus gowing a gamer market in those regions. New markets are quikly growing (China SKorea), this means Japan is becoming more and more a after thought. More devs are forgetting about Japan and looking for sales in US and Europe, Capcom is one of them. Last gen Japan was only 20% of the market, more money can be made in games designed for US or Eu audience. Even if it costs half, a PS3 game can be ported to the 360 and PC. And it does not compete with Miyamoto on a nintendo platform. Some PS3 game versions have out sold the Wii version, those were 360 ports so the notion of bigger returns on the Wii are nothing but your opinion. Wii is the only console so technologically weak that a healthy 5 years life cycle cant be guaranteed. (its not in the position that PS and PS2 were in) the competition is a hell of alot better then the PS or PS2 ever had. It will never surpass the Ps2 user base. Best way for a third party is a PS3/360/PC multi platform game. DMC4 is a good example.

If you look at rough PS2 sales figures, I beleive that it sold 40M in both Europe and USA, compared with 30M in Japan (very rough). You can see that a console can win worldwide even if Japan is not counted, as USA and Europe are such huge markets. Resistance has sold 1M out of 3M PS3s. If a developer can make a game that good, it can sell well on any console. Also companies who are starting to develop games for the PS3 now, will not have it finished until next year, when the scene will have changed drastically, there will also be at least 10M PS3s, maybe as much as 15M. This is plenty of systems to make plenty of sales

Price is not an argument in Japan. PS3 costs around 480$ (60000￥) and the society is rather rich. Only reason of weak sale is lack of games. Japan market right now is made mostly of casual gamers. Maybe it's because of lack of free time maybe it's because of something totally different... I don't know. Fact is games like MGS4:GoP will help but PS3 in Japan needs also or maybe mostly games like upcoming Golf game. Maybe an answer for this is Europe. I think there is a big chance for Sony to win all currently small markets of eastern Europe. The standard of life is going up. More money to spent etc.

1. Things can change. But more game-developers in the USA and Europe come into business. And worldwide more countries buying games, so the japanese market has a decreasing part of the worldwide market. So I think the importance of the japanese market is decreasing. It needs only one example, to show, that the console-market can be win in other markets. Possibly Microsoft is able to show it. 2. At the current rate. 3. Yes, development may be cheaper for the Wii. But then you can Multiplatform on 360, PS3 and PC. That reduces costs also. And in the end are counting the sales of the games. Wii attracts many casual gamers. Will they buy the same amount of games, as the hardcore users (or at least enough). 4. Too early to declare it can reach the PS-userbase. And too early to declare, that XBOX360 and PS3 cannot reach it. Conclusion: Yes, it looks good for the Wii at the moment. But things can change quickly. So it's too early, too say anything definitive. I personally wait for the holiday-sales, before I will try a prediction. And even if the Wii wins over a userbase of 100 million: That doesn't necessarilly says, that 3rd-party dont support the other consoles. Gamecube get some 3rd-parties, and they could sell well (Resident evil for instance). So it would be completely wrong for a 3rd-party too concentrate on the Wii now. (It was wrong dont to support the Wii before, as some 3rd-party-devs did, they now try to catch up.)

Japan is the smallest of the three markets and its share is getting smaller, the future is in the US and European video game markets. That's why a company like Capcom jumped into the next gen early and has already had 2 games on the 360 because they knew there was money to be made in the US market. I think the maker of those games was talking about how there is nowhere else to go in Japan, but there is still a booming amount of first time video gamers in Europe and America...

The Wii is not gonna reach the PS2 userbase unless the amount of video gamers in the world really explodes in these years and then the Wii wins this generation, because this generation is the most competitive one since the Genesis/Super Nes generation. 

Japan is the smallest market for PS3 and 360 because the number of core gamers is reducing, and the number of people that are still interested in core gamer games is also. This is the declining market that Nintendo is fighting for, they aren't going to just forget about their home country, they want to try and win it back some how. Tell me again that Japan is the smallest market when DS has sold 16 Million in Japan 12 Million in US 12 Million in 'Other' Right... that is the smallest market - you are correct. I'm not saying what this guy says it true but everyone else that has posted in this thread about Japan being insignificant is also wrong.

People are also missing that Japan has some of the strongest developers in the world and their primary focus is on Japaneese customers. Square-Enix, Namco-Bandai, Capcom, and Konami are far more likely to produce exclusive games on a console that has sold strongly in Japan as compared to a console that has sold poorly in Japan. Why is this important? Well think of all of the games that really have worldwide apeal and most of them come out of Japan; a factor in this is that Western games (typically) don't sell particularly well in Japan.

Whether you need Japan to sell well in the rest of the world is debateable, but performing well in Japan does make it easier to sell well in the rest of the world.

 No. It increases costs. What you probably  trying to say is you can target a bigger market for a comparatively little extra cost.

Japan IS the smallest market. The DS is a beast that has never been matched and never will in Japan. The PS1/2 sold 20m units, and the console market has stagnated there for those 2 generations. The Wii should increase the total userbase, but despite this, Japan isn't even 1/3rd of the CONSOLE market anymore. This has to be the most information given without proving anything about dev's. The title should read "Why Nintendo needs to dev for the Wii, and not PS3/360" I'd sugguest you re-do your lists with games actually made by non-Nintendo, Sony and MS devs. You'd be suprised. Japan will play a part of the next-gen market like it always has. However, as always, the US and Europe as well as emerging markets will increase their user base higher than Japan, and will continue to make Japan a smaller market. Expect a post shortly with some relevant sales information about the US, and how the software market is doing here, in the worlds largest videogame market.