Look at Japan yearly since 1996. That's as far back as I believe the data is credible.
1996:
HW sold: 10M
SW sold: 48M
1997:
HW sold: 11.8M
Sw sold: 54.1M
1998:
HW sold: 10.3M
SW sold: 52.8
1999:
HW sold: 13.6M
SW sold: 57M
2000:
HW sold: 10.4M
SW sold: 43.7M
2001:
HW sold: 11.8M
SW sold: 37.6M
2002:
HW sold: 10.6M
SW sold: 39.5M
2003:
HW sold: 8.6M
SW sold: 38.1M
2004:
HW sold: 8.9M
SW sold: 37.1M
2005:
HW sold: 10.3M
SW sold: 37.5M
2006:
HW sold: 13.9M
SW sold: 68.8M
2007:
HW sold: 16.4M
SW sold: 70.2M
2008:
HW sold: 12.4M
SW sold: 62.3M
The Japanese market isn't shrinking at all. It boomed in 2006. 2008 is small compared to 2007, but 2007 is also the biggest year in the Japanese history.
Myth: The Japanese market is decreasing in solid numbers. WRONG.
Okay, but in a sense - that's beside the point.
Let's go look at YoY hardware shipments, and the Japanese market share here. This takes a fair amount of time to do, so I will only do from 00 to 07. I'm also only doing the christmas halves, as the other half doesn't appear correctly.
Fy 00:
5.77M out of 26.4M = 21.9%
Fy 01:
6.24M out of 28.52M = 21.8%
Fy 02:
7.42M out of 29.94M = 24.7%
Fy 03:
5.87M out of 29.49M = 20%
Fy 04:
5.4M out of 26.9M = 19.7%
Fy 05:
8.2M out of 38M = 21.5%
Fy 06:
7.4M out of 35M = 21.1%
Fy 07:
11.08M out of 42.1M = 26.7%
... And sold numbers for FY 08:
8.65M out of 48M = 18%
Beware that this is just half of the years (christmas Quarter, October through March), and only up untill March 08.
So I'd have to say that this points to:
No - the Japanese market is not shrinking.
- In complete numbers, it is increasing.
- In market share, it saw a slight drop in FY 08, and it might drop some more in FY 09. But really, this isn't a lot compared to pre-2006. To VGChartz members, though, it will seem like it dropped, as most joined in the great 07.
- The reason for the market share drop is quite simple. Europe. Americas is seeing similar drops as Japan, so is it really those dropping? No, of course not. Europe is increasing more than the other 2 areas, eating their market share. Nothing Japan specific.
And a final note:
The Market share presented here is flawed. It's only for half of the year (I can only open half of them), but as it is like that all the way, it shouldn't make any major impact... I think.
Extra note:
This post is very short indeed.