I think the main reason is not necessarily under performing PS360/PC games but high development costs and long development times. What this causes is that you only release a few big projects a year, and for small developers only one every few years. But you also are thinking to the future and developing on other projects. Thus you are solely dependent on outside funding and the success of the current titles on the market. Meaning if one of your titles doesnt' perform well then your current titles start eating away at more money as you aren't getting a lot of money in return. Even if one of your big titles does great, you are still depending on it doing more than you expected for extra profits to fund your current problems.
This is something that has hurt western developers. AS many have said, they just took on too many projects and the HD Platforms hurt them because they yielded high development costs and long development times. They are left with few projects releasing and a mass of ones in development. It's easy to understand how they'd go in the red even with titles performing well. Took the PS2 generation mentality which worked due to the opposite for development and it backfired. It also doesn't help how the HD consoles are not the ones who took off and are getting all the media.
Thus we are already seeing the switch of developers because they just can't keep all these projects in the works for the companies. At first they were able to slide by, by using Wii, DS, PSP, and PS2 as quick cash cows but after mid 2008, that just won't work anymore. We've already seen the Japanese developers jump ship to the platforms that are less risky and you'll see the same thing happen with the western developers. Sure they'll keep the main products on PS360/PC because they know they can still make good money but all those extra projects in development that we do and don't know about will be canned or transfered in favor of Wii/DS/PSP/PS2 development. Especially considering the userbase this only makes sense.
I mean PS3 and 360 sell software just like Wii and DS and at high rates considering the user base but right now it doesn't matter about that. What matters is being able to release numerous products at little to no risk and having a few to jump to high sales and gaining large profits. Hell with the Wii and DS right now everything seems to be doing that which makes them even more approachable. I'm not saying PS360/PC will lose all development but devs are going to cut back. I think Monster Hunter 3 to Wii was the first sign of this happening and then Dragon Quest X was the next one. They will still get the big games we expect, that won't change, but they aren't going to get the mass and many exclusives.
