JAN. 6, 2010 • Enterbrain, Inc. reported that sales of the PlayStation 3 in Japan have increased nearly 70% since the Slim model was released in September with a drop in list price of ¥10,194 ($110). There was little good news for other segments of Japan’s video game industry, however. Console hardware sales decreased 13.6% to ¥221 billion ($2.38 billion) for the year, while Nintendo’s Wii saw a decrease in sales of 30%. Game software sales fell by 1.8% to ¥332 billion ($3.58 billion).

Impact: While it would seem that the market in Japan was in decline, the decrease was actually not as severe as DFC had forecasted.  A decline in hardware revenue was naturally to be expected, but DFC was also forecasting a 12% decline in software revenue. Recession or not, the industry faces a time when the current game systems are aging and the market is flooded with low cost software.  We expect another modest decline for 2010.