Land of the falling sales

It’s been a tough year for the Japanese games market. Sales are down and the country’s successful development sector is falling behind its Western rivals. Christopher Dring takes a closer look…

Long seen as the home of the video games industry, Japan has hit troubled times over recent years.

Software and hardware sales have spiralled downwards, with the latest data from Famitsu showing a 10.5 per cent drop in sales for the first half of Japan’s 2009 fiscal year (April to September). A result driven by falling sales of Sony’s PSP and Nintendo’s Wii console.

The current situation of Wii cannot be defined as healthy," said Nintendo president Satoru Iwata to investors last month.

The price cut seems to have the least impact here than other parts of the world. It is our urgent mission to recover the momentum of Wii during the holidays utilising Nintendo’s strength.”

Indeed, there is reason for cautious optimism over the Christmas period. Nintendo is hoping to drive sales with the launch of its new DSi LL console as well as New Super Mario Bros Wii. Meanwhile, Sony will capitalise on its recent PS3 price-drop with the impending release of Final Fantasy XIII in December.

Japan’s flagging development community is another concern for the territory. Once the kings of games development, Japan’s studios have been eclipsed by its Western counterparts. And Keiji Inafune – the producer of Dead Rising and creator of the Mega Man series – declared at the Tokyo Games Show in September that the Japanese games industry was ‘finished.’

One glance at the Japanese Top Ten shows a distinct lack of new IP, with old favourites Pokemon, Dragon Quest and Monster Hunter still the country’s biggest sellers.

To be honest, I think that Western developers are superior to those in Japan overall, so we the Japanese developers should realise that we have to work hard to reach the Western level,” admits Platinum Games’ executive director Atsushi Inaba.

And Inaba also feels it is time to stop developing games for just Japanese consumers, and look at creating for a worldwide audience.

We’re fast reaching a stage where it’s going to be about individual developers and not about what country they are in. Globalisation is coming to our industry too,” he says.

In Japan, we have to develop with securing the hearts and minds of a global gaming audience as our primary goal.”

And it’s not just developers looking West either. The country’s publishing super-powers are also turning to Europe, with Square Enix snapping up Eidos, Namco Bandai swooping for Atari’s European distribution business and Temco Koei launching its own initiative.

Ten years ago the European market and Japanese market were almost equal,” says Tecmo Koei boss Kenji Matsubara.

During the decade, the European market has almost doubled, while the Japan has stayed the same. Our European business is not so big, but we see many opportunities for us to expand, and this is why we launched Tecmo Koei Europe.”


The Famitsu Game White Paper team from Enterbrain talk us through the sales for the first half of Japan’s fiscal year, which runs between April and September 2009, and makes predictions for the Christmas ahead…

The overall market in Japan for the first half of fiscal year 2009 dropped by 10.5 per cent year-on-year (Fig 1). This is mainly attributable to weak hardware sales, which saw a decline of 15.1 per cent year-on-year. Software sales also declined by 7.5 per cent year-on-year.

The decline in hardware sales was mostly caused by the weak performance of PSP and Wii (Fig 2). Not to mention, unlike last year, the lack of strong titles such as Monster Hunter Portable 2nd G and Mario Kart Wii.

In terms of hardware, DS and PS3 were the only winners. As DSi was launched and the long-awaited Dragon Quest was released, DS total sales reached 1.69 million in the six months period.

The price cut for PS3 implemented on September 3rd boosted unit sales by 65 per cent. It is very likely that this boost was mainly triggered by those potential hardcore gamers having waited long for the price cut.

In contrast, despite the fact that Xbox 360 had a Yen 10,000 price-cut for the elite version, it was not strong enough to offset the dip from last year’s price-cut and its positive impact was limited.

On the software sales side, while DS saw the rise of 21.4 per cent year-on-year, the rest of the platforms saw a decline (Fig 3). Intriguingly, the biggest chunk of this DS rise was brought about by the launch of Dragon Quest (Fig 4).

There are several factors contributing to the popularity of the title such as the fact that it is one of the most long-awaited killer title series ever launched for the DS platform and that it features Surechigai” (wireless passive communication capability), which enables multiple players to enjoy the game in parallel.

Furthermore, downloadable content – which is being added constantly – seems to be another supporting factor for the device’s long-lasting popularity.

Going into the year-end sales season, it is likely that PS3 would gather the biggest attention supported by the recent price-cut to below YEN30,000 and the launch of long-awaited Final Fantasy XIII from Square Enix on December 17th.

While Wii and PSP also had price cuts, the impact would not exert significant impact compared to PS3, which has benefited from longstanding consumer pullback.

That said, although third party publishers of Wii have been struggling and thus the system has been perceived a little anxiously, the launch of New Super Mario Bros Wii would certainly boost the console sales.

About MCV Staff

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