I have a little question regarding Japan and the faltering console market. The common explanation here is always that Japan is a portable nation, for reasons such as limited space in the apartments and long commutes.
My question is then: Why then were consoles popular in the past? What has changed in the past decade? Have apartments gotten smaller? Commutes longer and more frequent? Or did the Japanese populace always want handheld gaming but the hardware just wasn't there?
I don't think there's a definitive answer to that but this is my interpretation, based on what I think and know.
I think it's less about looking at it entirely as "Japan is a portable nation" and more about looking at why people in a certain region or culture play games. In Japan, the videogame boom started taking off in the 80s when times were really good for the economy. During the bubble economy there was a lot of money to throw around for that generation, resulting in expensive hobbies being very viable. Stuff like LD players, videogame machines, expensive game carts, they were very viable products for a lot of people who were willing to spend. Parents spending on the children, etc. This created a culture where kids were very exposed to such things growing up and formed a connection to them. Even when times got worse in Japan during the 90s, it didn't stop this young generation from growing up in to students and working adults, and using their spending money to continue to boost this industry they became so fond of.
Yes, people commute a lot, and living space is limited, but it's not so limited that you can't have consoles. That's just rubbish. But it does tie into the great changes we've seen in the last ten years. Portables got more and more advanced to a point where they could offer familiar gaming experiences on the go. That was probably the first stage of change, I would say around the DS/PSP era. Phones also got more and more advanced, and became an essential tool everyone needed, even children. This wasn't the case in the 80s or 90s. So this was another big change in society. Now, we can combine those two factors along with the fact that the Japanese economy has continued to suffer. There was no recovery back to the golden age.
As people grow older and start their own families, it is increasingly less likely that they will build the same cultural foundations for their kids that they had when they grew up. It would be a different foundation. So buying expensive consoles are less common, buying (comparatively) more expensive console games becomes less common too, and instead they get kids cheaper portable systems with cheaper games, or just let them play games on their smartphones which are mostly "free" anyway. These kids as they grow older will be used to that level of entertainment, and not have any nostalgia for console experiences. Obviously there are still kids who will be interested in those things, but the point is that it's less of a norm and more of a luxury. That results in market decline for consoles, and it's hard to really see it going away or the decline stopping, because culturally it's moving more and more in the other direction.