Right now, in the wake of the DSi launch and ahead of the imminent Tokyo Game Show, the video games industry is just one big back-slapping party. Or is it?

According to experts at Japanese publisher Enterbrain, the market for games and hardware shrank in the first half of the current fiscal year – the first time it has done so in four years.

Hardware slide

April to September saw the market decline by 21.3 per cent to ¥239 billion (£1.3 billion) compared with a year earlier.

Instead of steadily increasing numbers, the company found that hardware sales dropped by a third over the year.

Top of the list was Sony's PSP at 1.58 million sales, with the DS in second on 1.31 million.

Unsurprisingly Nintendo's Wii was the best-selling console, with 1.11 million shifted. The PS3 managed just 350,000 sales, while the Xbox 360 limped in at 140,000.