Console generations don't 'die off' unless they're supplanted by something new.
The fact that handhelds and mobile have a stronger foothold and market share in Japan (and Korea) honestly speaks more about lifestyle (commuting, etc) rather than taste in games. Granted, I'm not saying Japan doesn't have a different taste to begin with (moe, etc) but I think the PS3->PS4 transition is a little stunted by that, all else being equal.
That being said though, like I said PS3 isn't going to 'die' in Japan for no reason. I'm pretty sure many mid-tier developers are still going to pump out games for both it and Vita, and I'm not even talking about the VN crowd.
That's why I said the transition is going to be interesting to watch. Aside from the projects with $$$ and ambition to throw around (which, non-coincidentally, are also banking on the international fanbase, e.g. MGS and FF/KH) and can 'deal' with a lagging domestic market, I'm foreseeing a lot of PS3/PS4 cross-releases announced in the next two, maybe even three or four years.
Heck, there's historical precedent for that, especially with Bandai Namco itself. Even on the handheld front, GE2 released both on PSP and PSV, and the PSV version had enough going for it to merit the cross-generation straddle.
Yeah, the reverse is also plausible. When there's a vacuum for relevant content the rate of adoption for titles near the top of the pile are pretty damn high.
