You do realise this is a good thing, right? "Or have they gotten to you to?"

Anyway, I believe that Japan isn't becoming irrelavent to the gaming indstry, hell people don't generally change from hardcore gamer to casual gamer overnight. However, I believe that the Japanese market (for hardcore gamers) isn't growing as quickly as what it is in the US/Europe. If you get what I'm saying.

 Mario appeals but still takes more skill than casual games, it isn't as simple as many casual games

 Wow, dude, I didn't realise that you owned England... that's amazing. Yeah, I'd get pretty annoyed if I had trespassers on my land asking me to take down my flag.

Without immigration who would do all of the lower-end jobs? The proud Englishman wouldn't, would you work for minimum wage when you can live off benefits and get more money? 

The Gamecube was also cheaper than the PS2 when it launched in Japan.

On Topic:

People will say Japan doesn't matter any time they don't support the individuals perceived view of gaming. If a certain game flops in Japan, Japan suddenly doesn't matter. If a certain genre is struggling in Japan, Japan suddenly is out of touch with things.

In all fairness the stagnation of gaming last generation probably killed gaming for many Japanese. Don't get me wrong, last gen was one of my favorite, my all time favorite games, but from remember, the games and genres we Westerners thought made last gen one of the best were by and large unpopular or unsuccessful in japan. What genres do matter to the Japanese though suffered though last gen, we saw a stark decline in the RPG genre and while some great RPGs came out last gen, remember that last gen was Final Fantasy's fall from grace and the bulk of many other RPG and RPG-genres were less than iconic and many borderline shovelware. Traditional games like Sonic, Mario, Zelda, Starfox or Donkey Kong simply didn't live up to expectations and cast doubt on the franchises' once thought invincible. Last gen was also the death of Sega as a console contendor and its replacement was the contemptable American Xbox. Nintendo fell even further into decline with the Gamecube and the PS2, the percieved future of gaming at the time, was little more than a platform of necessity to many japanese gamers as oppossed to the bastion of gaming it was seen as in the West. All the classic franchises and all the classic genres the Japanese knew and loved let them down last gen. And then for everything they had banked on Sony to have been dashed with the PS3 and PSP, its not hard to see why they've become dissallusioned with gaming.

At this same time though last generation we saw the true emergence of the handheld market as more than just novelty in gaming, expanding not only handheld playing field as it was previously known but capitalizing on the lost glory of the golden days of gaming (NES, SNES, Genesis, etc) which the Japanese so yearned for.

I am a bit worried by Mario's numbers, but honestly it somehow doesn't surprise me, something about Super Mario Galaxy doesn't seem like magic to me. I played it at Gamestop, it was okay, I'll be getting it, but I'm afraid we won't see it be as big a smash hit as many had hoped. Much to the glee of Wii haters I'm sure, but that's all part of the game here, fans spinning the facts to their favor.

That's really a pointless claim. Sony & Nintendo are Japan based, most of our games still come from Japan. Their sales numbers are absolutely insane for a country of their size, especially the opening sales you mentioned.
It's just a different habit: The Japanese audience tends to abandon "old" stuff and jump on new stuff much quicker than the rest of the world. Look at the GBA, GC, even PS2. Same for the software: Incredible sales for 1-3 weeks, then a steep drop.

If you were refering to the situation right now: I think Japan's enthusiasm for the Wii has cooled down quite a bit, but the PS3 (let alone the 360) can't capitalize on that fact yet. So the Japanese are waiting for the next move each company is going to make - will Nintendo refuel the Wii craze with Mario Galaxy, Wii Fit & their 2008 lineup? Or will Sony win them over?

So SMG doesn't sell as you expected and that means Japan is irrelevant. If it sold as you expected, then I guess you would be posting that it was an indicator of everything you were saying, right?

They are just in no way irrelevant. They actually are much more game oriented than the US. That is shown by sales of videogames in Japan being many times on par with sales in the US, even with the smaller population.

Good games always sell there. Handhelds sell because they have good games and it is a gaming everywhere solution. They just seem to be more aware and won't buy a console with no games. By this I mean your beloved Wii.

Then why has the Wii been selling like wildfire there up until recently when there were arguably less games on it then there are now?

Maybe Wii Sports just had a huge market everywhere. It kind of achieved its market in Japan.

But the discussion is not about why it was selling. It is about being irrelevant. I still didn't see a good argument for Japan being irrelevant.