MaxwellGT2000 said:
Many places and sites state the Japanese gaming market has been hurting stating no single console has replaced the PS2. The other general view is that handhelds (together) have shifted to the dominating the market in Japan, but this is just inaccurate.
Basically if you look at the overall top selling games in Japan (http://www.vgchartz.com/worldtotals.php?sort=Japan">sales) the top 10 best selling games are dominated by handheld games, and a lot of the top 50 are handhelds as well, but it shows that one console usually dominates in market and sales, but that race is between all consoles in Japan its not so sectioned off like in America where they seem like two different markets.
What does this mean? That it wasn't so much of a handheld shift as they've always been there, it does go up and down like any market, as seen with the GBA (sales) which only had 5 million sellers and 23 selling more than half a million, but it must be stated that GBA's life was cut short vs other handhelds. This also means that PSP (sales) doesn't "dominate" with DS as co-Japan rulers, PSP more or less is doing below par, with only 3 million sellers and less than 10 games selling more than a half a million.
What does this lead to? Home consoles, SNES (sales) had 29 million sellers and 64 doing more than 500k. PS1 (sales) 33 million sellers with 79 selling more than 500k, a nice increase. PS2 (sales) with 21 million sellers (less than both SNES and NES) but 74 game selling more than 500k, still lower than PS1 but 10 more half million sellers than SNES, still a bigger decline.
Now we get to this gen (remember these are not the "final" numbers as more titles are coming), DS (sales) 33 million sellers and 61 500k sellers, which already ties PS1 in million sellers and almost as many half million sellers as SNES. Wii (sales) with 12 million sellers but only 18 selling at least 500k, not too terribly bad for the second place console in the race. PS3 (sales) only one million seller and six half million sellers, which is in line with the PSP's track in Japan.
Numbers don't really lie for the Japanese market, all consoles including handhelds are in the running to "win" the race, typically there is one that dominates, with another getting some nice sales, but with DS doing on par with Japan's biggest era, its obvious things aren't going down, in fact the Wii being the second place console is selling more games than the other second place consoles like GC and N64, so things could go better for Japan this gen over any other gen, and console gaming is not hurting 
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I agree with you in that the Japanese market is not down, in fact, it's up significantly from last gen if we go by hardware/software sales (no idea about revenue).
However, there is a handheld shift occurring. Looking at the top 10 best selling games is extremely flawed. It only shows which consoles have the most top-heavy games, and we already know that Pokemon sells the most in Japan. It's misleading - look at the top 10 games in Americas for the 5th gen, you'd think the N64 won that region over.
Look at the total software sold for a more accurate picture. Here are the total software shipments for older consoles, the numbers speak for themselves:
(source)
NES: 225.9mil
GB: 157.1mil
SNES: 194.9mil
GBA: 72.9mil
(No Sony consoles, can't find Japan-only, they mix it with Asia)
Notice how home consoles always sell far more software than the handhelds? In fact, the GB and GBA were on the market longer than the NES and SNES (leaders 89-05 compared to 83-96), yet barely managed to sell half as much software in the same time period.
The same cannot be said this gen, as the DS has already shipped 162.7mil software by Sept09, which is already above the Gameboy. I'm unsure how far it'll go from here, but at the very least it'll overtake the SNES software. The home consoles are far behind the handhelds' pace - at the end of the third year, VGC has them at ~65m software sold, while handhelds were at ~104m.
The Wii + X360 software will never catch up to the DS, and the PS3 may never catch up with the PSP. This is shocking, as this has never been the case before - not even close, when looking at the older handhelds. To conclude, the "handheld shift" exists, it is not an illusion. Numbers don't lie, right?
As for the decline in home consoles...
I believe the current-gen home consoles are about flat with the PS2 gen, but it's counting on the strength of the Wii's top heavy games. The Wii Series alone makes up about 21% of all current-gen home console software sold, according to VGC. In fact, that's about on par with total PS3 software. That's insane. When looking at individual IP's that used to sell loads, it becomes clear that each third party game is not only selling less, but less games overall are headed to the home consoles themselves.
Core games, or the games the "enthusiastic" gamer cares about, are simply not selling as well as they used to. The home consoles can barely keep up with last gen even with the expanded audience titles, which obviously means there has been a decrease in traditional games' sales. Whether this is caused by the split in third party support due to heavier support on the handhelds or PS3 (second place console) instead of the Wii is up for debate, but the end result is what we have - lower sales.
Think of it like the American market if it didn't have the PS3 (a second HD console) to hold up its sales. Even though overall hardware/software would be keeping up with last gen, it'd look like the core market is collapsing. Luckily, this isn't the case, as both HD consoles are doing well in the west, which is why they continue to receive so much third party support.
Conclusion: Japanese home consoles are seeing less support, lower sales on their core titles like RPG's, Sports and such. There is a handheld shift, but the overall market is not down (though I don't see anyone claiming this anyway, only the home consoles).
I actually had a longer post typed up, and I accidentally closed it. Blah.
Leatherhat on July 6th, 2012 3pm. Vita sales:"3 mil for COD 2 mil for AC. Maybe more. " thehusbo on July 6th, 2012 5pm. Vita sales:"5 mil for COD 2.2 mil for AC."
