It's just like the opening of the TGS with SE talking about how the Japanese industry is not going well. I think the problem is their business model. Most of these companies decided to keep the same business model as they did last generation. Now games cost more to produce but generate the same revenue or slightly less (MGS4 will sell about the same as MGS3 for example). Square Enix have invested so much on the technology of FFXIII that it's taking them forever to release the game so they produce less games (they could have released 2 Kingdom Hearts and 3 FF during the generation but now we're mostly likely going to see 1 and 2).
Also, a lot of JRPG developers are accepting money from MS to produce their games. The result: the games are exclusive to the 360 and all flop (except Lost Odyssey).
Now, when we look at companies like Nintendo, Majesco and Marvelous. They certainly have a worldwide appeal and have no problems at all.
How many cups of darkness have I drank over the years? Even I don't know...
