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Wii Leads Jump in Japan's Game Market

Martyn Williams, IDG News Service Thu Mar 27, 10:35 AM ET

The console game market in Japan grew 13.4 percent in 2007 thanks largely to the popularity of Nintendo's Wii, according to a report due to be published on Friday.

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The entire game console market was worth ¥685 billion (US$6.9 billion) in 2007, with the hardware and software markets about evenly matched. In the previous year the software side of the market had led the industry but the sector was rebalanced last year due to the availability of the Wii and Sony's PlayStation 3, said Media Create in its annual "Game Market White Paper."

The PlayStation 3 launched on Nov. 11, 2006, and the Wii hit store shelves in Japan on Dec. 2, 2006, but early popularity of the consoles meant that many sales were delayed until 2007. Price cuts for the PlayStation 3, which was criticized early on for being too expensive, also helped boost sales later in 2007.

Total hardware sales rose 31 percent to $3.48 billion and software sales were virtually unchanged at $3.39 billion, according to the report. The estimates are based on point-of-sales system data gathered by Media Create from hundreds of retailers in Japan.

"Sales of Wii software rose strongly but those for the PlayStation 2 fell so they offset each other," said Kenichi Chiba, an analyst at the Tokyo company.

The Wii has been credited with revitalizing Japan's console game market and expanding the gaming population-- the number of people who regularly play video games. Its innovative wireless and motion sensitive controller and a low price have been key to attracting many people who might otherwise not have bought a game console. The Wii currently sells in Japan for $250, versus $400 for the PlayStation 3.

Sales of the console totaled 1.1 million in the few weeks of 2006 during which it was on sale, and 3.9 million during 2007 to take total Japan sales to 5 million units by the end of the year, Nintendo said.

The Wii remains popular. In the week from March 10 to 16 the Wii was the number two-selling games device in Japan with sales of 55,845 units, according to Media Create. In first place was Nintendo's handheld DS with sales of 57,651 units.