WSJ: Wii, DS 'vulnerable' in Japan's shrinking game market

The </i>Wall Street Journal</i> says hardcore game sales, PS3-PSP tag team are endangering Nintendo in its home country, where annual game sales are down 18 percent.

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Following the revelation that Japanese Wii sales declined 63 percent in March, even Nintendo president Satoru Iwata is expressing concern. "The Japanese market is not very strong right now overall," he told the Wall Street Journal in an interview. "So we need to do something to re-energize it." For the year ended March 31, Japanese game sales were down 18 percent--a stark contrast to the US, where game sales rose 19 percent during the 2008 calendar year.

The Japanese PS3 Biohazard 5 bundle.
The Japanese PS3 Biohazard 5 bundle.

Iwata's attempts at deflection couldn't obscure the fact that the PlayStation 3 outsold the Wii last month in Japan, 146,948 units to 99,335 units, according to Famitsu publisher Enterbrain. The island nation also saw two third-party PS3 games--Sega's Ryu Ga Gotoku 3 (aka Yakuza 3) and Capcom's Biohazard 5 (aka Resident Evil 5)--outsell Wii Fit, the month's top single SKU in the US. Biohazard 5 may have also boosted PS3 hardware sales courtesy of a Japan-only bundle featuring the game, an 80GB PS3, and two DualShock 3 controllers (pictured).

The PS3's March victory comes several months after Sony's portable, the PSP, outsold the DS for several weeks thanks to sales of the popular Monster Hunter Freedom Unite, due out in the US this June. While Nintendo has retaken the handheld front with the DSi, Japanese analysts are worried that slowing sales of Wii and DS hardware and software could augur similar declines across the globe.

"The usual idea is that whatever you see happening in Japan, you tend to see overseas two to three years later," KBC Securities' Hiroshi Kamide told WSJ correspondent Daisuke Wakabayashi. So far, though, that trend hasn't hit the US. In March, the Wii's 753,000-unit domestic haul crushed the PS3's 276,000-unit total.

After calling Nintendo "vulnerable" in its home market, Wakabayashi also got some anecdotal evidence by speaking with a 43-year-old Tokyo housewife, who said her two boys have grown weary of playing Wii games and are now asking for a PSP--but not a PS3. "Maybe the Wii's software, designed for families, is not as exciting," she pondered.

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