A big piece of this who east vs west game culture can be explained fairly easily on japans side. Most Japanese gamers simply dont know about Western games in the first place...
I had a Japanese exchange student once live with my family for a year and it was first time he ever heard or played a prince of persia (he even was subscribed to famitsu) I asked him did he ever hear about western developers? Epic? Ubisoft? Blizzard. (he knows mostly for starcraft) He never heard of Counter Strike! Well you can say his first time playing a lot of western games blew his mind open.
Most Japanese media tends to report...well japanese developed games more. Most Western third partys dont even distrubute games to Japan either, leaving them to launch without much hype or any announcement at times.
As for Japans development issues can be summed up nicely with,
Poorly translated or no effort localizing, resulting in bad voice actors or mess of scripts.
Dated controls and gameplay.
Characters that dont have a broad appeal in design but instead look more like a romance manga characters. Or even worst loli manga designs.
Games having a LOT of anime cliques lately, I dont mean well shaded/animated action scenes. I mean long boring mindless dribble, then most intense action in cut scenes than actually game play.
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