Handhelds swell Japanese market

Each year, the Computer Entertainment Supplier's Association releases a report of the past fiscal year on the state of the Japanese console gaming industry. The association's numbers indicate that the Japanese game industry hit bottom with a pretty dismal 2004, but bounced back in 2005, according to the Japanese-language Weekly Famitsu.

In 2005, combined hardware and software sales rose 13.9 percent from 2004's 436.1 billion to 496.5 billion yen ($4.3 billion). Software sales accounted for 314.1 billion ($2.70 billion), while hardware took in 182.4 billion ($1.57 billion)--a jump of 51.9 percent, largely due to the sales of two handheld systems. In 2005, Japanese gamers scooped up 4.25 million Nintendo DS and DS Lite units and 2.61 million Sony PlayStation Portables.

Over the past two years, handhelds have grown to control a 63.2 percent share of the Japanese game market. The inverse of the handheld revolution has been a corresponding decline in the Japanese home-console share. It decreased from 68.3 percent in 2003 to 36.8 percent in 2005--a loss of 159.8 billion yen ($1.37 billion) in sales.

Japanese game manufacturers made out quite well in terms of worldwide sales. Global shipments of Japanese products came to over 1.36 trillion yen ($11.7 billion), of which 487.1 billion yen ($4.18 billion) was in software and 872.7 billion yen ($7.5 billion) in hardware. This is a massive increase over 2004's totals, and handheld sales again provided the large hikes. Worldwide, Nintendo exported 7.34 million DS systems and 6.24 million Game Boy Advance SP units. Sony exported 11.36 million PSPs.

One of the more interesting statistics from the Computer Entertainment Supplier's Association is the average cost Japanese developers spent making a software title for each game platform. The figures, based on questionnaires sent to developers, don't include budget-price games.

The association found that the most expensive system to develop for is Sony's PlayStation 2, at 139 million yen ($1.2 million) a game. That's more than double the cost of a typical title on Sony's PSP handheld, at 63 million yen ($541,000) a game. On the other end of the spectrum, developing a Nintendo DS game costs a relatively modest 39.8 million yen ($342,000).