TOKYO--The Computer Entertainment Supplier's Association (CESA), Japan's game industry trade group, today announced that it has released its annual Games White Paper, which details statistics on the video game market in Japan for the previous year. The report shows that during 2003 the increasing number of gamers and development studios in the country spent less money buying and developing games.

　　According to the CESA report, the number of gamers in Japan is on the rise. Thirty-seven percent of the Japanese population actively played games in 2003, a 12 percent jump from the 25.6 percent in 2002. That means Japan had about 34.4 million gamers last year, compared with 23.6 million in the year before. Furthermore, CESA estimates that Japan currently has about 8.97 million people who play games on their mobile phones and 3.43 million people who play online games.

　　Although more Japanese citizens are playing games, they are spending less money doing so. Domestic software sales in Japan were down from 249.2 billion yen ($2.267 billion) in 2002 to 230.6 billion yen ($2.098 billion) in 2003. Likewise, hardware sales declined from 139.7 billion yen ($1.271 billion) in 2002 to 118.4 billion yen ($1.077 billion) in 2003.

　　Overseas exports also dropped by 10.1 percent, with both game software and hardware shipment slipping compared to 2002. Hardware sales fell from 648 billion yen ($5.897 billion) to 586.1 billion yen ($5.334 billion) in 2003, and software sales fell from 225.5 billion yen ($2.052 billion) to 199.3 billion yen ($1.814 billion).

　　While Japanese publishers may not be selling as many games as they used to, they are saving money by making their research and development more efficient. A game for the PlayStation 2, which had the highest R&D expenses, according to a sample of 37 companies, cost an average of 39 million yen ($355,000) to make in 2003. In 2002, that number was 59 million yen ($537,000), meaning that companies have been able to cut development costs by about 33 percent. Games for the original PlayStation had the lowest R&D expenses, costing an average of 5 million yen ($45,000) in development in 2003. It cost almost triple that in 2002, at an average of 14 million yen ($127,000) per game. CESA estimates that game design cost is inversely proportional to the amount of time since a console's launch, due to improvements in development tools and developers' skills.

　　CESA is selling the full 209-page Games White Paper for 6,300 yen ($57).