Capcom and Square Enix have the same problems:
they're using Japanese developers to make games they think will sell in the western market. the problem is the same thing SE have, which is that JP developers are having problems marketing their games in the western markets.
on this basis i think Konami made an excellent decision to hand Castlevania over to MercurySteam - who've done imo a phenominal job on Lords of Shadow - and i think that Ninja Theory know exactly what they're doing with Devil May Cry.
however.... WTF Ninja Theory are doing with that shit Unreal Engine 3.
i think - high level Japanese developers at Square and Capcom are generally older. i think that in Japan its more difficult for younger developers to get a foothold in more authoritive positions.
here in western studios, we tend to have developers who are younger and thus more in tune with the contempory style of todays young gamers. so they know what works. thats why games like God of War or Uncharted are so well recieved - the developers are todays young gamers - they know what works.
where as in Japan, we have older developers who are making games that simply arnt cool for todays gamers. which is why Capcom's attempts are bizzare. same for Square Enix.
its the 21st century of gaming, i agree with what Infuane said about Japan being about 5 years behind!!