“An abrupt and enduring slowdown in consumer confidence – particularly amongst non-core gamer demographics – began to bite in the final quarter of last year,” Barton says, adding that this abrupt slowdown has been felt throughout all entertainment media.

In regards to gaming, he says, non-core gamer demographics are precisely the type of consumer that have been largely responsible for driving Wii's commercial performance, and are also a big reason why the Japanese games market has expanded.

“As a result, this generation's growth curve is likely to be longer and flatter than that of the previous hardware generation. But while the games industry is feeling the impacts of the wider economic situation I believe that the games industry will continue to prove that it is far more resilient than almost all other entertainment media industries during times of widespread economic hardship.”

Barton lists a number of reasons why Japanese hardware sales have not met expectations this generation: “The PS3's relatively high price, regardless of the numerous justifications from Sony that the value proposition is sound, is a significant drag on sell-through. While we do not doubt that there are significant levels of unfulfilled demand for the console in Japan, the wider economic situation makes it easier, perhaps necessary in many circumstances, to delay non-essential big ticket purchases.”

Yet Barton adds that the flagging Japanese market value is not entirely due to the high price of the former leading brand in the industry. “The lack of a main series Dragon Quest or Final Fantasy game on [the Wii or PS3] is another factor,” he says.

“Historically these games have helped drive mass-market consumer adoption of home console hardware in Japan, and in previous generations we have enjoyed a main series title earlier in the cycle. This year I expect Monster Hunter Tri (Wii), Resident Evil 5 (PS3/X360), FFXIII (PS3) and, further out, Dragon Quest X (Wii) will drive hardware sales in the Japanese market.”

Barton says that Japanese gamers can be ‘content elastic’, meaning that hardware adoption rates respond strongly to the release of titles which resonate well in the marketplace. “While there have been some significant software hits thus far,” he says, “perhaps we haven't had the critical mass of titles which help drive console adoption from the hardcore into the mass market.  I think this is best summed up by what Phil Harrison once remarked, that ‘killer games don't sell consoles, but killer catalogues do.’”