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Concern Over Dropping Japanese Console Sales
Thanks to an anonymous reader for pointing to a Yahoo/Reuters Japan article discussing worrying issues for Japanese console and software makers. The article states that "..sales of family game machines in fiscal 2002 were 8.76 million units, down about 20% from fiscal 2001, when sales jumped 30% ahead of the year before." It also notes that "per-title sales [for Playstation 2 software in 2002] dropped 25% to around 63,000", even as the total volume increased to almost 30 million units. The article postulated this is because "..the market is turning from one of growth, to one.. where manufacturers compete with each other to get a bigger share." Possible solutions suggested include "producing items that can link to audiovisual equipment, or.. cultivating markets overseas."
The problem is obviously piracy. The games market was doing fine, but now there's this Interweb thing that people use to steal stuff. Ban fibre-optics!
Release some of all the cool stuff in Europe and USA - Why is it, that we get stuff ½ - 1½ year after its released in Japan ??
japans economy is in in the toilet no wonder the sales of consoles is down. That and there market has been pretty much flooded with the dang things.
Consoles continue to sell units up until the end of their product cycles, but the large majority of existing installed base is not buying games at the same rate that they were in the past. For the current PS2 owner, the number of worthwhile NEW titles is waning.
Somehow this is all my Ex-Girlfriends fault... I just know it.
First, I'd like to say that the Atari 2600 is by far the best console every released.
Other than that, I think a monopoly in the console market could be beneficial. Or at least standards on how to execute software. With this, no matter what console you buy, you'd be able to play the same games. Why? Because then you don't buy an X-Box (@@%#@#) and then find out that they're going to make loserific games for it.
We have standards for everything else, why not this? The difference would be where the consoles excel - antialiasing, speed, depth, features, different controls, etc.
Or on the other hand..anybody know a console company able to set up us the monopoly?
Vehicle Stars used car search is my current project
does this mean we'll be left with only the good games designers?
A blog I run for the wealth
the gaming world took a great leap in size after sony released its PlayStation , which attracted , what we now name , light users , well , a hell number of them. Yes , they are the potential cosumers , but they are more readily to lose , or change , their interests in game than heavy users do.
And so what ? One time , they contribute to a great part of the cake and then another time , they leave without a sign.
KOS-MOS
Japan's economy in the toilet: This can be said of the economy there for the last 20 years. Funny, for a "languishing" toilet economy, it's the world's second largest...
Also, for a "languishing" economy, the disposable income in Japan per capita seems to phenomenal. The appetite for smaller, more, better, faster in Japan makes the US and other countries look backward. These people eat up technology like nothing, and they pay for it.
Check out, for example, dynamism.com All the laptop vendors can sell better and more expensive stuff in the Japanese market. Japanese buyers will spend a lot more on things like HAM radios, Laptops, Computers, etc. And they like them small, fast and good on batteries. The Japanese metro communications networks are also very advanced.
Another more distinct possibly is that they have grown tired of games on 2D screens. Yeah, the game may be 3D, but the flat screen thing might not do it for them anymore. Also, in the past there was good reason to own a computer and a few consoles. Now, you basically need a PS2 and a computer.
Another Japanese phenomena is things like Kobe Beef, which makes aged Angus and A-Prime look lean. The stuff is $22/lb. Japanese. Also, if you ever take a trip to Napa Valley, the Japanese buy expensive wines like water. It's a fascinating culture with many interesting aspects and bizarre flaws. But they have an obsession with having only the best beef, the best wine, the best cuisine (sushi, yakitori, oh man, so good), the best electronic crap, the best video game experience.
My guess is more of them like gaming on the computer now. I remember seeing Japanese guys on EQ over a friend's shoulder (I would never play EverCrack, too addictive), and these guys were machines. They would have max level characters weeks before anyone else.
The article fails the burden of proof to its thesis. In order to show decline, you must show a simultaneous drop in: console sales, console titles. With the dropping price of PCs, you must also include PC's as a console and count game software as console titles.
If you can show a consistent drop in all those areas, then yes, the thesis is upheld. Even better, if you multiply console sales drops by their previous market share, you can take a weighted average and pretty closely estimate that drop.
The article fails to do this. I'm not saying the article is wrong, but what happened to responsible journalism? Oh, yeah. FOX!
Let x = sales in 2000
if sales went up 30% in 2001, then...
x + 0.3x = 1.3x = sales in 2001
and if sales went down 20% this year, then...
1.3x - 0.2*(1.3x) = 1.04x = sales in 2002
therefore, that means sales over all went up, since 1.04x > x, 4% since 2000. Or I could be crazy.
The cancel button is your friend. Do not hesitate to use it.
If they drop any farther, they'll become zero-state!
these boxen have no names
Listen here everyone brought one already until PS3 comes out there is nothing wrong with the market it just that so many people already owe either PS2 until they produce the new PS3 or make better games to go for the PS2. The market in Japan will be down. thanks for hearing me
To all who had witness let me give this upon you in one of my favorite terms "PH34R MY M4D SKILLZ!!!"
How many major game consoles were released in 2001? Two. How many in 2002? NONE! Perhaps sales were up in 2001 because everybody rushed out the get the latest and greatest and now that they've all got it there's nothing new out there to buy.
Similar reasoning for games. There are less titles out for new consoles, so when a console is new, per-title sales are high. That's why developers like to have their games be release titles along with a new console. As the number of games in the market goes up it only makes sense that per-title sales are down.
or.. cultivating markets overseas.
One thing I still have never really understood about the video game industry is why Japan is number one. Isn't the North American market MUCH larger? Wouldn't it make much more sense to cultivate this market, since there would be much more money to be made? Meanwhile developers seem content to not bother bringing some games over for what seem like arbitrary reasons (Where my Bonk on Gamecube?). I know these companies probably consider Japan very important since that's where the company started off, but when 75% (made up number) of your fan base is overseas, I would think you'd go with it.
In a similar vein, Europe is all but ignored...
-"One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man." -EH
I think you really don't understand that the Japanese economy has *truly* been in dire straits the last couple of years. The prime lending rate has been cut to nearly zero percent for a couple of years now (and hasn't really helped stave off the drop in spending), there continue to be massive layoffs in major companies and industries, college graduates are having a very, very difficult time finding work, and sales of luxury items have been declining steadily despite your evidence of "Japanese liking the best stuff". Yes, rich Japanese people like the best stuff, just as much as rich Americans do. The rest of them can't afford it.
It's not by choice - it's what the market demands over there.
Electronics cost 2-3x what they cost here and you can ONLY buy the latest and greatest high end equipment, because THAT'S ALL THERE IS. This isn't because the Japanese consciously have said "We only want new stuff!" but rather, the companies have dictated "We only sell you new stuff."
Games cost $80-$100. They've always cost $80-$100. Selling used games/CDs/etc. is considered "Grey market", with many stores closing down due to police pressure (only to move down the street and re-open.)
The market in Japan is screwed up. Food prices arecompletely controlled by the farmers in Japan. You can't get non-Japanese rice in Japan - even non-white varieties like bhasmati, because it's too cheap.
My last company had to TRIPLE the price of its servers for Japan because the resellers told them $1000 would make people think that it was a bad product, but that for $3000, they'd think it was a great product. I don't quite understand how we got away with selling half the hardware at 3x the price of a normal PC, but that didn't stop Japan from becoming one of our largest markets...
Just check out the per capita stats for Japan in the world fact book. This information is corroborated elsewhere. You'll see a failing Japan is a lot better place to be fresh out of college/university in this world than say, 98% of all other countries in existence.
While there are flaws in their system, and they have bizarre aspects about them, I would consider this console thing a sign that they are more interested in something else rather than on the verge of economic collapse. It is very bad, particularly coupled with the recent US slump, but by no means are people flooding from Japan to emigrate to China or North Korea.
I just though it would be a lot smarter to look at a bunch of factors than to come out an claim to know the answer as the original poster did based on anecdotal evidence.
Sorry to be repetitive... but this isn't a lame flamewar or a series of trolls so I'll post again to get more attention to this ... for fun.
Just check out the per capita stats for Japan in the world fact book. This information is corroborated elsewhere. You'll see a failing Japan is a lot better place to be fresh out of college/university in this world than say, 98% of all other countries in existence.
While there are flaws in their system, and they have bizarre aspects about them, I would consider this console thing a sign that they are more interested in something else rather than on the verge of economic collapse. It is very bad, particularly coupled with the recent US slump, but by no means are people flooding from Japan to emigrate to China or North Korea.
I just though it would be a lot smarter to look at a bunch of factors than to come out an claim to know the answer as the original poster did based on anecdotal evidence.
The 3D fad is over. It's time for the return of 2D gaming.
That means nothing. The discussion is about how the Japanese economy is changing internally, not about how it compares to other countries.
It is possible to have a failing economy that is still better off than many other countries. Using your own link to CIA world factbook, you can see that even using numbers 2 years ago the economy is deflating, GDP is decreasing, and unemployment increasing year-to-year. Their economy is still strong compared to other countries, but it is also shrinking, which means fewer people are inclined to pick up shiny new luxury items like consoles, and are instead choosing to save that money or spend it on something more essential. And, while we're on the subject, the Japanese culture has a very strong sense of denial when dealing with this kind of problem. I realize that this statement is somewhat subjective, but take for example how shocked the Japanese people were to discover they had lost WW2, when just a week earlier they had been convinced that they were handily winning the war, despite the obvious signs that they were losing (e.g. younger and younger conscripts, loss of territory, constant blackouts and bombs dropping on major cities). While my example is a bit extreme, there are many other examples that further demonstrate this characteristic in other facets of Japanese society.
I'm sorry I didn't link the facts I quoted to trusted 3rd party sources, but they are all true. If you don't believe me, see what the Economist has to say about the Japanese economy, and how it's currently being handled by the government (as in, it's not being handled). The Diet, as they are wont to do, gleefully ignore the huge, glaring problems in the economy. Dozens of reform plans have been introduced only to be dropped or watered down to the point where they are ineffectual. Most of the attention is instead diverted to "scandalous" material such as who is sleeping with whom, or who is getting kickbacks from the construction industry, rather than the fact that more people than ever are filing for bankruptcy.
While I do have plenty of anecdotal evidence as well (I have many close Japanese friends living and working in Japan, and I personally do business in Japan regularly) I didn't cite any of it.
Per capita is a bit misleading, especially when the cost of living is much higher there than it is in most places in the US.
Gas is over $10/gal.due to the fact they import 100% of their oil, and levy heavy transportation taxes on gasoline to help pay for their public transportation system. Combined with the hefty registration fees, many people do not own a car in Japan.
Obviously this means energy is more expensive as well. When I was in Japan, I think I calculated that 1kilowatt of electricity cost about 15x what it cost back home (this was 10 years ago, mind you.)
Rent is equally outrageous - especially when you consider the size of the average apartment. It is not unusual to see "apartments" which are barely the size of a bedroom here going for thousands of dollars a month.
Due to the scarcity of land, most people buy an apartment, since only the rich can afford actual houses... Oh, and you have to be a land owner in order to be able to vote. So, only the rich and farmers can vote, which explains a lot about Japan's trade and market policies...
So, yeah, per capita it "looks" like the nation is doing great...but considering that 80% of your income goes for living expenses, there's not a whole lot left over.
You might also be interested to know that on average, the Japanese put more money into savings than Americans...but when you consider that Japan has no IRA, 401k, or other retirement programs, about the only thing left is the good old fashioned savings account.
People wonder why the sales of consoles and games is slowing down over there? This is why. People just don't have the large amounts of disposable income that Americans have, and at the same time, their goods are among the most expensive in the world. For crying out loud, a simple can of Coke was 110Y (~$1), a head of lettuce was 300Y (~$2.70), and a Big Mac was 780Y (~$7.10)!
Now you know why it seems that Japanese tourists are "big spenders" when they come to the US.
Excellent point. There have been rallies in the Nikkei signalling the "end of the slump" in the last couple of years (I forget how many...possibly only one huge bump....maybe two...but they were the result of stimulus packages and government spending...) The Economist this month has an article about these programs and details why they failed. They failed basically because the Japanese government is skiddish about deficits. It sees a deficit as a real no-no, even in times of a rough economy (even though the rule of thumb in the western world is "debt to start the economy again" and when things get going well...pay down the debt....someone forgot to tell our government about that last part...heheh)" But I digress...anyway...
These stimulus packages were working great, then just when you think the Japanese economy is going to make it out of the doldrums (or in this case the coma...), the government in Japan nixes the programs and the economy tanks again...sometimes worse than it was before. Cutting the lending rate to less than 1% means that unless they spend their way out of THIS problem...they never will make it out without serious shrinkage of their economy (moreso than has already occurred.)
I mean, our cyclical recession has been pretty bad here of late, but in Japan it's been just awful compared to their double digit growth in the 80's....It was inevitable....nothing can sustain that growth when the rest of the world (i.e. your market) is slowing down.
Just alot of non-economist blather....back to the show.