In 2008, the UK games market managed to overtake Japan for the first time in history.

While retailers in the UK were no doubt overjoyed with the blossoming British market, in Japan there is a growing belief that the nation is losing its relevance in the global games market.

Early in February, Edge reported that the UK saw an annual software sales surge of‭ ‬26‭ ‬percent in‭ ‬2008, ‬while‭ ‬North America experienced a sales climb of‭ ‬15‭ ‬percent. Yet Japan saw its own market tumble. Down 13‭ ‬percent from 2007.

Even Nintendo President Satoru Iwata voiced his unease on the matter, telling investors after Nintendo’s financial report that “perhaps,‭ ‬the Japanese market is the least robust market in the world today with regard to home console systems.‭”

“The‭ ‬US the home console market is very robust,‭” ‬he said at the time‭‬.‭ ‬“If the‭ ‬US sold two or three times as much as‭ ‬Japan,‭ ‬it would be tolerable.‭ ‬Yet,‭ ‬I feel that something is wrong when the‭ ‬US is selling ten times as much as‭ ‬Japan on a weekly basis.”

Such doubts are reflected across much of the entire Japanese games sector, with publishers such as Square Enix shifting its perspective to a global audience. Japan itself, meanwhile, continues to struggle as one of the world’s most damaged victims of the global financial crisis (on Wednesday it was confirmed that the nation’s export rate had fallen by an alarming 46 percent in January alone.)

Should Japan be afraid that many of its people have suddenly turned away from videogames? Perhaps not.

Ed Barton, games analyst for Screen Digest, believes that there are a number of issues surrounding Japan's fall in retail figures, though none of which explicitly suggest that the nation is any less compelled by videogames. 

He tells Edge that the Japanese market decline was mainly due to the PS2 and the Nintendo DS, one being the most successful home console in history, the other ready to dethrone the Game Boy as the best-selling handheld of all time.

Both these runaway successes have seen their imminent sales decline over the past few years; by both market saturation and the arrival of their successors. It is this console vacuum that has painted a picture of a hardware decline at the retailers.

“Declines in DS and PS2 were expected and largely caused by the cylical nature of the games industry,” he adds.

In regards to the declines in year-on-year hardware sales for PS3 and Wii, which were not expected, Barton argues: “while they’re hardly encouraging, I don't believe home consoles as such have fallen out of favour in the Japanese market, but that a number of factors have arisen which have delayed adoption rates.”