I think the two countries have very different business models that both have their own strenths and weaknesses.
Japan is a small market that seems to be driven by low to medium budget games, and the market is very fan driven which leads to many of the high selling games featuring idols/anime series tie-ins/fanservice, with the exception of a couple of a few very well known franchises that buck the trend (Final fantasy, Dragon Quest) This model makes it hard for anything outside things like Final Fantasy or Dragon Quest getting good penetration outside of the internal market but it makes for a very stable internal market in the long run.
The West has a much larger market that is driven by high budget games that have frequent updates (yearly sequels/high levels of DLC) and very high marketing budgets. This model makes it hard for outside markets to penetrate it but it will create a lot of instability in the internal market until only a few companies are left in the market. This is because it follows the Hollywood model where production and advertising costs get so high that companies eliminate each other until only a handful are left that advertise and control the market to such a high degree that smaller companies within that market really have no chance of growing. Similar to how the top 6 film studios in America have roughly 90% of the market.
That's my take on it anyway.
