The Japanese videogame market shrank 9% in 2010 to $5.9 billion, according to figures compiled by game biz mag publisher Enterbrain.

It’s the third consecutive year drop for the sector, which peaked at $8.3 billion in 2007.

A lack of hot new games was one of the reasons for the slide in addition to the price cuts for many game platforms that began late 2009.

Sales of platforms dropped 18.9% to $2 billion in 2010. Nintendo’s DS handhelds topped the chart with almost 3 million units sold — plunging 26.4% on 2009.

The biggest gainer was Sony’s PlayStation Portable, which racked up sales of 2.9 million units for a 25.2% year-on rise.

Meanwhile, game software sales slid 2.5% to $3.83 billion. Seven games, including the newest entries in the “Pocket Monster” and “Monster Hunter Portable” series, each recorded sales of 1 million units or more, the same number as in 2009.

Enterbrain surveyed 3,600 games stores nationwide, collecting sales figures weekly.