The Japan Console market has been in a state of decline since 2007 when the industry peaked at 688 billion yen. Today the market is worth less than half of that at 321 billion yen and so the future of the console market in Japan is now more important than ever. Therefore I have decided to write a report each month which covers the console market in Japan and how well each publisher, platform and Game title is performing. I may also integrate Mobile into this report in the future so we can see which console publishers are finding success there. But for now this report will deal with how software and hardware is performing in the console market.
The report below will look at software and hardware sell through to consumers at retail in Japan between the 29th of February and the 3rd of April. All data is provided by Media Create unless otherwise mentioned.
The Console Software market in Japan reached total packaged unit sell through of 3.57 million units at retail during March 2016. This was a decrease of 14.6% from 4.18 million unit sales during March 2015. Dragon Quest Monsters: Joker 3 led the top 10 this month with sales of 467K on Nintendo 3DS. The game was expected to be another million seller, similar to Dragon Quest Monsters: Joker & Dragon Quest Monsters: Joker 2 which sold 1.57 million and 1.32 million units respectively, but it looks like that the third instalment may fall short. Whilst sales are not terrible, this can only be seen as a disappointment for Square Enix who would have been hoping for more.
Square Enix will also be disappointed with sales of the new Star Ocean title on PlayStation 4 which opened with 113K during its first week on sale. This is lower than Star Ocean 4’s opening on Xbox 360 with a lower install base and now Square Enix will be hoping that the PlayStation 3 version, due to be released next month, will be able to boost cumulative sales to a respectable total of around 300K. Bandai Namco was the only other company that had two titles in the top 10 along with Square Enix. Gundam Breaker 3 had a similar opening to the prior instalment and as of the end of March has sold through 190K compared to LTD sales of 230k for Gundam Breaker 2. Gundam Breaker 3 has been performing quite well with the PlayStation Vita version having already matched LTD sales of the PlayStation Vita version of Gundam Breaker 2.
Digimon World: Next Order has had a fairly good opening on PlayStation Vita with 75K units sold through during March 2016. This compares well to Digimon Cyber Sleuth which sold through slightly more. Bandai Namco will be happy that the Digimon series is retaining a loyal audience. Bandai Namco will soon be publishing Dark Souls III in the West but it was From Software who published the game in Japan which has sold 246K units on PlayStation 4 and Xbox One. This is already on par with what Bloodborne has sold but the game failed to match Dark Souls & Dark Souls 2 which both went on to exceed 350K each. Whilst Dark Souls III should easily exceed 300K, it may have trouble exceeding these games without a well promoted re-release. Once again, the majority of sales for Dark Souls III will come from outside Japan.
The Division opened well for a Western game at number 5 in Japan with 120K sold during March, thus further demonstrating that Western games are becoming more popular in Japan. Pokken Tournament sold a fairly average 112K units during March 2016. What is of note though is that this new fighting IP has sold nearly twice as much as what Street Fighter V has sold to date which shows just how much Street Fighter V has slipped in Japan. The new Hatsune Miku title on PlayStation Vita opened slightly lower than previous titles but is still expected to sell similar to these titles.
Koei Tecmo’s crossover with Level-5 has proved a success with 270K units sold through during the first week, the game is now on track to surpass 500K units. The Yokai Watch and Romance of the Three Kingdoms crossover has performed much better than Pokemon and Nobunaga’s Ambition crossover which sold 170K in the same time period and only 350K lifetime. Dead or Alive Xtreme 3 had an average opening with 71K sold to date, this is indeed already better than the 2nd title in the series for Xbox 360, but it is much lower than first game sales on the original Xbox and It’s clear that Koei Tecmo will be relying on sales in Asia, Imports from the West and high attach rates on DLC to recoup their investment.
One thing to note for March is that software sales continue to decline and that Nintendo 3DS continues to account for more than 50% of all software sales. In fact the Nintendo 3DS and PlayStation Vita account for around 65% of all packaged unit sales in Japan at the moment which shows just how big the handheld market is in Japan. The complete opposite of the West where handhelds only make up a fraction of software sales these days. Japan continues to be a Mobile and Handheld orientated market whilst home consoles such as the PlayStation 4 and Nintendo Wii U account for less than 25% of all software units sold this month.
The PlayStation 4 was the best selling console this month with 149K units sold during March 2016, this was however down 19.9% compared to last year when 186K units were sold. The PlayStation 4 has settled around an average of 30K unit sales per week since the price drop in Japan but there were no big titles that provided a significant boost to PlayStation 4 hardware sales this month. Dark Souls III only provided a very insignificant 5K boost during its launch week. To date the PlayStation 4 has sold over 2.68 million units in Japan and is on track to overtake the Wii U by the end of this year.
The Nintendo 3DS continues to decline YOY with just 142K units sold this month. The 3DS is now approaching the end of its lifecycle in Japan and is expected to sell considerably less than last year. This is primarily as the 3DS has reached its peak install base of over 20 million and is even on track to overtake the peak PlayStation 2 install base this year. There are not many units left being sold to new users and it’s likely at this stage that a good number of units are being sold as replacement units to existing users. Nintendo have taken a few measures to attract new users such as starting to include a charger with certain 3DS bundles but it’s clear that sales will continue to decline in 2016.
PlayStation Vita is on track to exceed 5 million unit sales next month in its most successful market. The strong handheld market in Japan has helped the console become a niche success there, however it has sold 4x less than the 3DS and this is reflected in software sales as well. The PlayStation Vita still remains a viable platform for many niche Japanese pubs and pubs looking to release multi platform games. So whilst the console will not sell much this year, it will still remain supported by a good number of publishers.
The Nintendo Wii U is currently the best selling 8th gen home console platform in Japan but this is due to end by the end of this year. Rumours from Nikkei state that Wii U production is due to be discontinued this year and the console has already been out of stock at many retailers for the past couple of months which means that it is selling nowhere near where it could be. However, even if the console was in stock, the PlayStation 4 would continue to outsell the console and it is very clear that 2016 is the Wii U’s last year on the market. The console has been a slow seller and had some hit games like Splatoon (>1.3 million) but it is now reaching the end of its lifecycle.
The Xbox One has done horribly in Japan with it only now reaching the same number that the Xbox 360 sold in 1 week in Japan. This is 1 year and a half after the Xbox One launch. The Xbox One is done and dusted in Japan and there is nothing Microsoft can do to revive sales there. Xbox One will sales will not be appearing in future reports due to low sales.
Overall it’s clear to see that the dedicated console market is continuing to decline in 2016 and is on track to reach lows not seen since 1987. In 2015 the console market was worth 321 billion Yen, a far cry from the peak of 688 billion yen in 2007 and instead much closer to the 319 billion yen generated back in 1988 when the console industry was just getting into the swing of things.