I don't know. It's really hard to say. Japan used to be the best. I say from roughly 1985 to 2000, Japan was the best by far. Not only did they make the most innovative games, but they knew how to market them and turn them into hits. I believe Shenmue might have been a turning point for the Japanese. It was an innovative game that was way ahead of it's time, but that game could not sell what it needed to sell. We started seeing more of that in the 2000's. The West managed to take some of these ideas and turn them into games that could sell.
North America is probably the best today just because of the sheer number of good developers, but there was a time when the North America was better at marketing games than making them. A perfect example is the original Mortal Kombat when compared to something like Street Fighter II. Also, there's the FMV games from the mid '90s. They were mostly American products. American and Canadian developers have gotten a lot better over time.
I would say Europe is the weak link today. Europe could arguably hold it's own to the US and Canada about 20 years ago, but Europe is a mere shadow of it's former self. Most of the major developers were either bought up or had gone out of business. I think there no company the is a greater symbol of Europe's downfall than Rare. They were easily amongst the top 5 or top 10 developers in the world at one time. Today, I don't think they would even be in the top 50.
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