Atleast the DS and psp are doing great.

Worldwide mindshare.

to all that are saying they should be making games for the consoles that sell the most, who's getting those games you speak of?

It's just like the opening of the TGS with SE talking about how the Japanese industry is not going well. I think the problem is their business model. Most of these companies decided to keep the same business model as they did last generation. Now games cost more to produce but generate the same revenue or slightly less (MGS4 will sell about the same as MGS3 for example). Square Enix have invested so much on the technology of FFXIII that it's taking them forever to release the game so they produce less games (they could have released 2 Kingdom Hearts and 3 FF during the generation but now we're mostly likely going to see 1 and 2).

Also, a lot of JRPG developers are accepting money from MS to produce their games. The result: the games are exclusive to the 360 and all flop (except Lost Odyssey).

Now, when we look at companies like Nintendo, Majesco and Marvelous. They certainly have a worldwide appeal and have no problems at all.

I think they mean world wide Japanese games arent the huge sellers, you got Halo, Gears, Fable 2, Assasians creed, all western developed games

^ Wii sports, Wii fit, Pokemon, Mario Kart, Final Fantasy, Dragon Quest, Wii Play, Should I go on =p?

Well you are right I think if there are less J-Million sellers every generation compared to W-million sellers.

I would tend to agree with Kojima.
Software sales on the Japanese market outside of the DS handheld have been very poor this last few years compared to the beginning of the 2000s...

I mean, check sales outside of the release of a big titles, some weeks total console sales are bellow 100k...That's not even poor but just pityfull....

As for hardware, well the Japanese market is becoming smaller than the french market and last I checked the Japanese market was twice as big....

For a long time the Japanese game developers could sustain just on their internal market sales, that is clearly not the case anymore and they are having troubles expending to the West...

I think the problem is that a staggering percentage of top-selling Japanese games all come from inside Nintendo. They are literally overshadowing the entire rest of the Japanese development industry. The rest of the country isn't doing as hot.

The Japanese market becoming smaller than the French market? Wonder if this has to do something about that a part of the J-market is moving to the french Market lulz.

Kojima is saying this because he bet on the wrong horse. His premiere franchise is continuously falling in sales every iteration and is generating much more hype than sales.