TOKYO - JAPAN'S video game market shrank for the first time in four years in 2008 in the absence of new console launches, a report said on Tuesday.

Sales of video games and consoles in Japan dropped 15.3 per cent last year compared with 2007 to 582.6 billion yen (S$9.26 billion dollars), according to magazine publisher Enterbrain, which tracks the sales.

The decline was largely due to a dearth of new console launches last year, in contrast to a sales boost in 2007 from the launch of Sony's PlayStation 3 and Nintendo's Wii in December of the previous year.

In 2008, Nintendo sold 2.91 million Wii consoles in Japan, easily trumping Sony which sold 991,000 PS3s, Enterbrain said.

Nintendo has enjoyed strong demand for the Wii, which is aimed at people who would not traditionally play video games and has an innovative motion-sensing controller.

Nintendo also enjoyed sales of 4.03 million DS handheld consoles in its home market last year, while Sony sold 3.54 million PlayStation Portables, it added.

Microsoft logged sales of just 318,000 Xbox 360s last year in Japan, where the US software giant has had a tough time winning over gamers.

Console makers are hoping the industry will prove relatively recession-proof as financially squeezed people spend more time at home with their consoles.

But video game software sales dropped 7.9 per cent in 2008, despite brisk demand for certain titles including the 'Wii Fit' exercise programme. -- AFP