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Alic0004 said:

What he's saying is that they need to stop making Japanese games that try to appeal to a Western audience.  They should let Western developers make Western games, and Japanese developers make Japanese games.  This is possibly the first astute thing I've ever heard Wada say.  And then we collective spaz out on him.  And act as if he said the opposite, or as if the real issue is that he hasn't realized he could just make his company like Nintendo and everything would be great.  I'm starting get the feeling there's a real disconnect with reality here.

This isn't a full answer, though. S-E's current business model cannot be supported by sales of Japan-centric games alone.