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Riachu said:
I think the problem is that S-E are actually trying to appeal to Western gamers now. In the PS1 era, they didn't do that. They mainly developed games aimed at Japanese gamers and because of that, they had a unique appeal that many Western gamers found foreign, yet cool and hip. Now, their games are starting to become bland due to the need to appeal to Western gamers. For example, Resident Evil, believe it or not, was developed mainly for Japanese gamers pre-RE4.

 

Again, I think this is because they were growing up.  They stayed with what they knew.  They were Japan based, making for Japanese platforms, and they could see how the games sold in their home country.  Now, being much bigger and more established, they realize that there is more to cater to than their Japanese fanbase, so again, they are making business decisions because their growing period is over.