I don't agree with the 'if western devs had half the skill that japanese devs do'. Have you ever played a Blizzard or Bioware game? Actually, talking about Bioware, they have a level of depth in their games that's just remarkable, I haven't seen a Japanese game come close to that yet.
And the quote I put in (not sure if you read the whole interview too) doesn't completely go towards your point. You just seem to somewhat sidestep the issue, that western games are not marketed well in Japan. In that quote, he says how people believe that what you are saying is true, that essentially the Japanese have a unique taste in games (compared to the rest of the world) and the Japanese developers cater to that. Wada himself directly denies that (he says 'But I believe that is not the case, it was just a matter of poorly executed marketing.')
Further, a recent study (I can't link it, I find it on Joystiq and that's blocked here) says that marketing goes a much further way for selling games than quality. It's all about commericalization and marketing.
@Solid, I think its feasible for MS to get a stronger hold in Japan, if it could partner up with a Japanese company and do some serious marketing/PR. Will this happen? Not very likely.







