We know the US market for video games has been in decline since 2008, and that NPD anticipates that 2011 will be off as much as 3% from last year. The Japanese would consider that a great year, according to the latest figures from leading Japanese magazine Famitsu. They show the video game industry in Japan has suffered an 8% drop in sales over 2010, which is their fifth year in a row of lower sales.
In 2011 Japanese video game companies had a total of $5.9 billion in revenue in Japan. Hardware sales went up 2.4% thanks to the introduction of the 3DS (and to a lesser extent the PS Vita), for a total of $2.3 billion in revenue. The software side of the story was grimmer, though; software revenue dropped 13.7% down to $3.6 billion last year.
These numbers show the importance of the US market to Japanese manufacturers; for instance, PS3 sales in the US were over 4 times the sales in Japan. Interestingly, 3DS sales in the US have just now reached the level of the sales in Japan; adoption of the handheld device in the US is proceeding much slower than it did in Japan.
On the software side, the numbers show that Japanese consumers are primarily interested in Japanese software. Will this ever change? Also of note is the fact that 3DS titles dominated the top four slots in the sales chart, which bodes well for the 3DS in 2012 if they can keep on releasing good software.
It's also interesting to note that the two mobile game software giants of Japan, DeNA and Gree, combined to sell over $3 billion in software in 2010, or nearly the total of the entire Japanese video game industry. DeNA and Gree both had profit margins in the range of 50%, too, which is something that companies selling discs in stores can only dream of. Apparently Japanese consumers are rapidly expanding their purchases of mobile phone software and virtual items, while traditional video games are lagging.
Total hardware sales for 2011 (lifetime sales in parentheses):
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Nintendo 3DS: 4,135,739 units
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Sony PSP: 1,960,177 (18,237,108)
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Sony PlayStation 3: 1,467,261 (7,417,148)
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Nintendo Wii: 937,451 (12,167,743)
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Nintendo DS (total, all models): 711,204 (32,835,502)
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PlayStation Vita: 402,794
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Xbox 360: 114,075 (1,520,738)
Top-selling games in Japan for 2011 (lifetime sales in parentheses):
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Mario Kart 7 (Nintendo 3DS): 1,082,391 units
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Super Mario 3D Land (Nintendo 3DS): 1,042,511
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Monster Hunter Portable 3rd (Nintendo 3DS): 1,021,457 (4,502,446)
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Monster Hunter 3G (Nintendo 3DS): 809,322
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Final Fantasy XIII-2 (Sony PS3): 697,146
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Final Fantasy Type-0 (Sony PSP): 696,428
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Rhythm Heaven Forever (Nintendo Wii): 633,429
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Tales of Xillia (Sony PS3): 632,151
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Wii Sports Resort (Nintendo Wii): 612,807 (2,732,655)
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Wii Party (Nintendo Wii): 584,545 (2,123,773)
