Japan's videogames market declined 13 per cent in 2008 as the impact of falling PlayStation 2 software began to bite.
Although the UK and US both saw strong growth, fuelled by sales of games on the next-generation consoles, the PlayStation 3, Wii and Xbox 360 have all failed to make up for the now-fading PS2.
Sony's classic console saw software sales fall by 48 per cent over 2007 levels, which was enough to pull down the overall market despite all three newer consoles experiencing growth.
Portable software also fell year-on-year, with the Touch Generation series of games for the Nintendo DS experiencing slower sales.
However, the market is expected to pick up on key game releases in 2009, says Ricky K Tanimoto, global marketing analyst at Enterbrain.
"Looking ahead to 2009, a string of star titles are lined up to hit the market, including DS's Dragon Quest IX: Hoshizora no Mamoribito," he said. "There are also big console titles scheduled for release in 2009, such as Monster Hunter 3 and Final Fantasy XIII - leading us to anticipate the console software market will fuel sales of this year’s gaming market."
The information was released as part of a report by Enterbrain and its US and UK counterparts - The NPD Group and GfK Chart-Track.