The latest annual report from the Consumer Entertainment Software Association (CESA) indicates that the games market in Japan has fallen by 40% since a peak in 1997.
Sales of hardware and software dropped again in 2003, by around 11%, giving the market an overall value of ¥446 billion ($4.12bn) – around 40% of the US market during the same year.
Hardware sales were hardest hit, down by 16.7%, suggesting that the PlayStation 2 has hit saturation point – particularly since Game Boy Advance sales have been stable and GameCube sales up by almost 3%. Software sales were down 8.2%, compared to an increase in sales in North America and Europe.
Many companies, most notably Nintendo and Capcom, have commented in recent months that the fall is largely due to the overly complex nature of modern games, with the recent chart success of a number of pachinko simulators and the Famicom Mini series lending some credence to this theory.