The PS3 is going to pass the Wii in YTD sales after next week.

I find it interesting to see Microsoft trying to push themselves into this market while the natives are running like crazy from it...

The problem with the Japanese market is that it's full of franchises and little else. People are simply fed up of it. It's now considered more "in" to go socialise with your mates than sit at home playing games. Although I am a games programmer. I can't help but be pleased about this. I think that mobile gaming is where it's at and with the advent of flexible OLED screens, that side of things can only grow. Imagine a Nintendo DS which, when opened, actually contains one single long screen (yea they'll nab that idea and I'll disappear into obscurity).

Looks as if the japanese games market is mutating, but we'll never know what it's mutating into with retail-only stats.

Where are the players going? PC MMOs? Mobile games? Flash?

I hate the idea of "mobile" games, even though they're just DS/Psp with a phone hooked into them. And with technology having caught up to making handheld devices as superior as the PS One era, I can see now why mobile games is the "in." Cost less to make and you don't have to sit down in front of a TV and try to deal with a entire console. Still, I don't think mobile games can live up to what a console can give, what with better resolutions to offer and more memory for more content in games. As much as I enjoy this revolution, this is only a starter. People who get into these games will want to try something more as they mature as gamers, and thus, that is when the console scene will have to satisfy that.

For now, all we can do is adapt to the current market until the recession is over. Like I've read from other articles, this is a good time for people to learn from their mistakes.

How does this compare to the market drops around the rest of the world? It's somewhat difficult to put this information in context without that data.

Craig - they're definitely not going to mmos, japan's mmo market is really small. I think more likely players are turning away from games in general, choosing to just play a few games per year, like monster hunter, pokemon, wii sports, or dragon quest depending on their age group.

Andre: "If anything the arcade scene pretty much killed japanese console scene"

It's like Bizzaro world US. :)

@Andre Thomas

I'm curious, do you have any Japanese console vs. arcade market sales data to back up your insight?

Doug: "It's like Bizzaro world US."

actually its quite natural, everyone thinks japan is 'strange' because they read books 'backwards'; they are actually holding them right side up, they are just on the other side of the world. Its the same reason why their philosophy is inverted from wester philopsophy (process based vs results based). Its also why their animation is less gesture based and more detailed and flater.

it all makes perfect sense...

P.S. I would like to see some data on PC, Console and Arcade market sales and satuation in the US vs japan.

The problem lies in the general economy crisis Japan is stuck in, they changed the 50 year one party regime just recently because of this too. In Japan there aren't any social security systems you are used to and people there first cut on not so important things, Manga, Anime and Music shrunk by similar numbers during the last year. The westernization is going on for a while but Japanese companies move slower than western in that case as they don't trust as easily as we do.