"Comupter entertainment supplyer's association published the overview of internal game market. Software market is 336.7 billion yen, -8.6% y/y (=$2.81B) and hardware market is 144.6 billion yen, -32.8% y/y (=$1.21B).

Furthermore the population of game player is decreased to 23.6 million (-8.3% y/y). It conludes2.6 million network game users and 6 million keitai game players."

('Keitai' refers to mobile phones.) So the Japanese game market is shrinking. I've read predictions that 2002 was going to be the industry's biggest year until 2007 (the peak of the next-next gen cycle). But it seems a bit surprising to me that the software market is decreasing as well - OK, people have the machine, but shouldn't they still be buying games? Was it just the initial excitement that made them buy software? Perhaps it isn't the platform cycle, but is it more than the general state of the Japanese economy?

(From KoKoRo, where you can find the link to the whole article on these numbers in Japanese.)