I read the OP, aging population doesn't explain everything, Japan had an aging population 8-9 years ago too. 

Also I've been to Japan and spent several weeks there. 

The market is having demographic issues sure, but it's also seeing a massive migration over to mobile smartphone gaming. There is no doubt about it, Japan is the biggest app market for games in the world, bigger than the US, even though it has like 1/3 the population. And people here play on their mobiles a lot, so that tells you how crazy Japan is for smartphone games. 

we know about this and we already talked about this. The fact is that sales continued to increase all the way from 1987 until 2007. The trend has been in place the whole time but it didn't cause sales to decline, instead sales went up 2.5x during that 20 year period while the demographics shifted the entire time. sales are now 40% of what they were 10 years ago for dedicated devices, the trend you are talking about cannot account for more than 10 or 15% of the decline in the past 10 years.

We're living on the end of the era of massive growth brought to us by the industrial revolution, societies will now have to plan for this new reality in their own ways. In the context of Japan there is good news and bad news, the good news is that Japan is that fertility rates (might) have been slowly increasing, it's no where near the worst in the world but the bad news is that there are huge cultural issues, such as overwork, that need to be seriously tackled.

Still, Japan has been around for 2000 years, they'll probably be alright.

I'm not sure exactly what is the demographic of mobile player on average in Japan, but I can say for sure that in my previous company we were making a few hundred million dollars a year from highly paying users (hundreds or even thousand dollar a month per user, I've seen a guy spending 4000$ one month). I tend to believe that the market "migration" is not as much a migration than a very high monetization rate from a much more small, older, single people crowd (highly paid or leaving at their parent's home).

You know, when you look at the handheld gaming market, it's been in decline for a long time already, while the situation a decade ago was more like an exeption. I think somebody already addressed this in the thread. Problem eith the OP is the limited timeframe that misses the big picture.

This, by all means does not mean increased competition did not have any effect, just that it's not the "real reason" behind the market decline.

Also, the topic was about why Japan is in decline, not why the gaming market was in decline.

I believe Supercell have said the same thing, that there's roughly "a handful" of customers that are paying thousands of Euros a month playing Clash of Clans, while the rest is paying virtually nothing. The point is, that if you want to stay on top, you need to buy the gems - and who uses the most gems is likely the top guy in the world.

This is like the WOW gold trade a decade ago, just that the devs have figured outthe way monetise the in-game currency trade.

Japanese immigration policy starts with integration. They want you to integrate into Japanese society before having "full" rights, instead of multiculturalism (that's just a different word for anarchism). So yes, no racism here.

Because of the integration, Martti Turunen changed his name to a Japanese one, Marutei Tsurunen, in order to participate politics.

- True. For no "immigration policy", I think it means a "no immigration" policy, and that's true. Not taking refugees is itself an immigration policy (of no immigration).

- False. No "freedom" restricted. Restrictions concern right to vote, and that's not a freedom but a citizen right. Some places could restrict access to foreigners, but they are very rare, and I'm not even sure it's legal.

- False, but... given the fact Japan does not really give a significant amount of citizenship to foreign born, it's pretty much true that you will hardly have one, and that will be something rare enough to get a wikipedia page.

- Mostly true, depending on how you define racism. The more you speak Japanese and get used to Japan, the more you understand you don't get the same service and consideration from Japanese. You will not get the same politness, a waitress will argue back to you even if she made a mistake, some salers will try to ignore you, they will look annoyed, the change will be given back to your Japanese wife rather than to you that opened the wallet and paid, a bank will refuse to make a visa card, etc. At work, a lot of people will never agree with what you say, irelevant to what you say and what your experience is. I've spent 5 years here, and I believe most foreigners here for a couple of years with any Japanese ability think just like me.

I think that now explains the Japanese exchange students at my University lack of interest in guys and girls... 

This is kind of a similar trend to west - only a step or two further. The modern western young male have hard time getting it hard, which is caused by (excessive) watching of porn. Because of that, your real-life partner can't match fantasy image you've created. Looking at hentai, furries and all the overly sexualised anime characters, the Japanese youth is raised in an environment where there's no (human) sex, even the stereotypical anime female is dumb/naive enough to know what sex is.

Another thing is nutritional factors, especially on the exchange students. Japanese eat lots of seafood, which contain lots of iodine and other trace elements. Iodine causes high SHBG (low levels of free sex hormones), while selenium and zinc raise the sex hormone levels. Eating western, especially low meat and no organs, food that's depleted of pretty much everything (except for carbohydrates) is causing sex drive getting even lower. And, if you do not spend time on sunlight, the lack of D is only going to make things worse (this happens naturally for example when you move to northern and colder atmosphere).

Guilty as charged

I think you have to remember before Porn was on the internet, I imagine guys fapped a lot less...