Even though I agree with some of the article, I still have to say...

yes

Don't try to look innocent now, you naughy boy. We know very well about your posting practices.

Anyway I don't understand economics much, I would've if only I took it instead of that stupid subject called physics.

But what does this mean & will it affect me, i.e. a western gamer? not really

The big companies should stay big right? (SONY, ninty, square, capcom, konami, possibly sega)

They make (imo) the best games from Japan, all the devs that make niche/shovelware games will have a problem.

I don't think & hope this won't affect us all.

I'm not completely sure what bonds are, but if they dump them it seems like the article says it will have a big effect on the global economy as a whole. Not good, I thought we were coming out of this recession now.

I agree smaller developers, like ones that make the niche JRPG's that sell like 50K will have big problems, with rising dev costs on PS360 they may completely turn to the DS & PSP (if they haven't already). THose japanese dev studios are stubborn, they will never try to appeal to our markets.

Hmmm.. an interesting topic and one that is very difficult to analyse in regards to its effect on the gaming market. I definately agree that larger Japanese developers will start to focus on the Western market, or at least games which appeal to both, and as you said this already appears to be happening. I'm not sure how smaller, niche developers will be affected as although their games rely on the local market, the demographic who buy those products are perhaps the type who will continue to do so regardless of a worsening financial situation. I would expect family focussed and 'casual' games may suffer more but due to their already impressive base sales it hopefully won't have a major impact.

A weaking yen could be good for Sony/Nintendo as obviously their revenue from exports would increase which may be enough to offset any decrease in the Japanese market. Although I'm sure a weaking yen has other implications and I'm no economics expert so I can't predict what the overall picture will be.

And then there is the knock on effect to other countrie's economies which you mention which I wouldn't even know where to start with!

If Japan has an economic meltdown while the rest of the World gets by ok, gaming should be ok, only the big Japan centric companies will be in trouble but it will probably help the big exporters like Nintendo.

I don't think that's what's going to happen though. The world's economic problems are much bigger than Japan, and when the shit really starts hitting the fan the whole games industry will suffer. An upheaval could be good for gaming in the long run, though.

Yes.. you'll be playing K(orean)RPG or some Chinese rip off for a while when Japan melts down but it's still gaming...

Well from the gamers perspective I think it's clearly already affecting us. Nearly every Japanese publisher has from this gen made the majority of games westernised - and they clearly rely on the western markets more then ever before. Square Enix bought EIDOS for this reason, and seem to be trying to make Final Fantasy more and more America friendly.

Of course it's not all just cause of the economy, it's natural for any company the size of Capcom or SE to expand, and it was the Western market they were slacking in. However I think SE's accquisition of EIDOS was clearly for one reason only - the Japan market is at threat and SE, a company who previously took 90% of their revenue from Japan, has to find alternative sources.

It seems most of the 'big publishers' are positioned well enough to cope now though, very few still release games aimed specifically at the Japanese market.

If it was just Japan melting down, maybe it would be safe. Sony (and maybe Nintendo) would have to react, but most of their revenue comes from overseas (more than 70% and more than 80% respectively I think), and as you said a potentially weak Yen would mitigate the problem as well. Sony would probably have to cut capacity and do layoffs, while Nintendo would probably just cut some production capacity (but they outsource it anyway). If on the other hand the Yen doesn't go down, it's a whole other level of problems.

However I suspect the Japan situation and many other things which are wrong will cause problems in many places... Japan is a quite peculiar example, because people there save lots of money, and they do it by investing in Japanese debt. This is not the case in many other countries, in the US for example most people don't save any money, so US debt is mostly held by banks and foreign countries (like Japan), making it more vulnerable to these global meltdowns. For example Japan could choose to liquidate its vast holdings of USA debt to keep things going a bit longer after running out of lenders. This in turn would increase interest rates for US bonds and hamper US's government stimulus. The technical name is "clusterfuck" as you can see.

The way I see it is, the world's economies are almost all hanging on massive government stimulus and low interest rates from central banks. Watch what they do, not what they say. What they say is economies are recovering, what they do is keeping interest rates extremely low and stimulus measures firmly in place. Those who believe there's a sustainable recovery are fooling themselves or letting themselves be fooled IMO, and this year or the next will prove to be a rude awakening.