@bardicverse
According to Iwata the problem lies in "aging" gaming population in Japan (he showed some convincing graphs on this matter), i.e. low percentage of non-gamers (that's expected in highly developed game market of Japan compared to relatively undeveloped markets of US\EU) and high percentage of "sleep" gamers (those who didn't play games anymore, that's very disturbing trend). That leads to overall "mainstreamization" ("hardcorization" you may say) of japanese gaming population, standardization of gaming tastes and low variety of demands and offers of game market, as a result many people quit gaming at certain age (usually when they have family, kids etc.) at faster pace than in US\EU markets. Obviously under these circumstances Wii can't survive in Japan long enough aming the same demography as Wii aiming on makets abroad, it's already overgrown it's potential in Japan. In long run Wii needs some major "mainstream" for japanese gamers software releases (i.e. DQX) to survive or... miracle, something radically new that could turn a bunch of "sleep" gamers in Japan back to gaming. (That's what would have happen with US\EU game market in next decade if previous trends of narrowing gaming demography will be still intact... well, Iwata began his career as game developer around the crash of 1983, so he should remember that gaming market isn't immune to disaster, sudden or creeping).
//On sidenote, "Japan's reluctance" to western gaming is due to passive western publishers policy, that leads to low awareness of western gaming among japanese gamers. Japan is highly developed game market (high percentage of gaming population compared to overall population). When it exhausted itself (japanese market have it's boundaries, only 130M of population compared to billions of americans and europeans), japanese publishers moved to external markets to survive, to sell it's software (i.e. US\EU). This explains why major japanese publishers desperately want a piece of US\EU game market, and why japanese gaming culture penetration here is more significant than vice-versa. At the same time western publishers not so interested in Japan as long as they able to develop native market, which is relatively undeveloped compared to crowded by japanese publishers game market of Japan. In the case of crowded japanese game market, cultural penetration in it would cost more money than developing native market. So, I believe, insignificant cultural influence of western gaming on japanese gamers is the result of economical inexpediency at this point.
