Canada is surprisingly heavily into game development. Bioware is in Edmonton and Ubisoft has Montreal Studios. EA also has studios in British Columbia and (I only learned this 2 days ago) Silicon Knights is in St. Catherines, Ontario, which is only an hour and a half from where I grew up. I'm not saying they have the MOST studios or even the best, but they're definitely overlooked when it comes to game development and recognition.
Also, I thought Rockstar was British... correct me if I'm wrong :S
I have favourite studios from all over the place but if I had to choose I'd probably go with the US for Valve, Bungie, Santa Monica studios and a few others. Can't say I like any studios from Japan - I don't dislike any either. I don't keep up with a lot of the development around there but I certainly enjoy JRPG's... I'm just unknowing of who is making which and what the studio's track record is... (I'm new to the JRPG scene but loving every bit of it :D!)
Edit: After thinking about it more and reading some more comments I really can't choose. Britain also has Lionhead studios and Criterion as someone mentioned as well as a few others. Konami, Capcom and Nintendo are from Japan. Although I'm not a huge fan of any of their games I will give credit where credit is due. They do make some amazing stuff and have world-wide fanfare. I'm gonna call it an X way tie, where X represents all countries/regions involved in game development!
