JAN. 5, 2012 • According to Japanese publisher Enterbrain, the Japan game market contracted ¥459 billion ($5.9 billion), or 8%. The contraction is the fourth such year-on-year drop in a row.  Hardware sales, however, grew 2.4% to ¥179 billion ($2.3 billion).

Impact: The traditional Japanese game market has never been a major factor for companies outside Japan.  However, online growth is actually making Japan more attractive to outsiders than ever, even as the traditional console business declines.  One major issue is the slowdown is hurting the large Japanese development companies that make products that are popular around the world.  On the one hand it creates an opportunity for publishers outside Japan to fill the gap on console and portable games.  On the other hand, it has a negative impact on investing in new development for major new Japanese based game systems like the PlayStation Vita and Nintendo Wii U.