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Japan makes plenty of interesting and innovative games, they just don't relase them in other regions because they don't think foreign audiences will find them appealing( Disaster, Captain Rainbow, Fatal Frame 4).When they try to "go Western" we end up with terrible games like Resident Evil 5, a shooter/action game claiming to be a chapter in aruably the best survival horror franchise. Personally, I think all the Japanese third party developers should turn to children for and anime shows for new ideas. Also, they should take some risk and try to do something that hasn't been done to death in the West or in Japan, a difficult task to say the least but it'd beat just trying to copy what sometimes works for Western developers.