Alright, first off, Nintendo is to Japan what GM, Ford, and Chrysler are to the United States. An ingrained institution who creates culture that is irrevocably tied to culture. Hell, they even have Japanese school buses for kindergartners that look like a Yoshi float at the Macy's Thanksgiving Day Parade. So if Japan defaults, you can expect Nintendo to be making some hard decisions, which will have a definite affect on the quality of their games.
As for Japanese games selling more than Western ones, I don't buy it one bit at all . Red Dead Redemption has shipped more units than Super Mario Galaxy 2. No Japanese game in 2009/2010 has touched the numbers that Call of Duty: Modern Warfare 2 reached in such a short time. Mass Effect and Fable sell comparable numbers to any new Final Fantasy game. JRPGS with the exception of Final Fantasy is a niche genre with a quarter of the appeal that WRPGs such as Diablo have in the US.
The only numbers you can cite are the casual Wii games. Yes Wii Sports has sold more than any other game of this current generation, but how long has it been out?
Nintendo will continue to dominate the casual market and I am proud they are doing it.
As for the future, only time will tell. If the 3DS is priced above $200, then I see it having a hard time topping the DS due to it being a one trick pony for gaming. I know myself and a lot of people who would love a Nintendo handheld, but look at what Apple is doing and what the Sony PSP can do and think, why can't Nintendo release a gaming device that has cell phone and Internet capabilities?
