Japan's computer gaming market shrank by 21% in the first six months of the current financial year, due mainly to sharply lower sales of game consoles and handhelds, according to data released on Tuesday.

The total gaming market was worth ¥239 billion (US$2.4 billion) in the April to September period, according to the data from Enterbrain. The company publishes Japan's top gaming magazine, Famitsu, and is also a leading provider of Japanese gaming industry data. Hardware sales totaled ¥95 billion, down 33% on the same period in 2007, while software sales were ¥144 billion, down 10%.

"In the first half of the year there were four titles that sold over a million copies each and if we look at all of 2007 there were 8 titles that sold over a million copies, so when you consider this, the software sector in the first half wasn't so bad," said Hirokazu Hamamura, president of Enterbrain, at a Tokyo news conference.

The drop in the hardware market was largely a result of the current stage of the hardware lifecycle. Both the Nintendo DS and PlayStation Portable are almost four years old so a drop off in sales is to be expected. New versions of each device -- already launched in the case of the PSP and soon to come in the case of the DS -- should help offset declines but at best the market will remain flat, said Hamamura.

The PlayStation Portable beat out the Nintendo DS at the cash registers in the April to September period with sales of 1.6 million devices to 1.3 million, Enterbrain said.

In the console space sales are down in part because both the PlayStation 3 and Nintendo Wii were enjoying strong sales last year because they were relatively new.

During April to September this year the Wii was Japan's best-selling console with sales of 1.1 million units, said Enterbrain. The PlayStation 3 came a distant second place with sales of 352,000 units followed by the PlayStation 2, 219,000 units, then the Xbox 360, 139,000 units.

Looking ahead to the coming months Hamamura thinks the software market will remain strong thanks to several eagerly awaited titles that are due to launch including Dragon Quest IX, Wii Music and a new Resident Evil title.

Top 10 Best Selling Titles in Japan, April to September 2008 (Source: Enterbrain)

The IDG News Service is a Network World affiliate.