They didn't lose their touch - They did lose their sanity
Japanese Developers or rather the upper heads of the big companies(SquareEnix,Capcom) that have the important Franchises went full retard.
WE WANT OUR GAMES TO APPEAL TO THE COD COMMUNITY!!!...SCREW EVERYONE ELSE!ESPECIALLY OUR FANBASE!!!

Make your games Exclusive for the Sony Consoles and for the taste of the Japanese Market and of course Sony Community and they would be back to Nr1.
Bayonetta,the Tales of Games after Vesperia and other franchises that were completely designed for the Japanese Market and so on were awesome.

Its their own fault for destroying everything SONY has made for them just for some CoD Kids that will never get interested in anything else than CoD.

Funny that they say developers of the Fallout series and not creators of the elder scrolls series. They arent even the creators of the Fallout series, just Fallout 3.

If their next game is anywhere near the depth and and quality that Xenoblade was I would have to say they would pass them, especially in terms of quality. I wonder if we will hear anything about their next game at E3. I'm half expecting Retro's game and the next Smash brothers to be their perhaps ready for a Winter 2013 release.

I think one of the comments from the article said it best:

"Funny, I'm playing through Skyrim now and wishing Bethesda was more like Monolith Soft."

Yeah... I really hope they build on the Xenoblade foundation they built more than trying to become more like Bethesda.

Definitly surpassable. The combat on the elder scroll series is sub-par due to the first person perspective design. Its the crafted world that Wow's everyone. Fallout 3 is brilliant aswell, but its a shooter/rpg. I mostly just used Vats for the combat. Theres also alot more improvement that can go in there.

I wonder if that means they are going to make RPG games with actual role-playing like bethesda instead of JRPG games.

Don't wory, those are usually reserved for PS3

Well they are one of the hottest developers in Japan. Whatever it is they're making, I eagerly await it.

Hopefully "be like Bethesda" means become a highly-successful RPG developer, as opposed to systematically pumping out buggy sandbox games.

is it that nintendo fans have higher quality bench marks than fans of the hd twins, because ive seen quite a few of those remarks in this thread.

do nintendo fans have better game taste, or at least have higher expectations on games in general?