Scoobes on 07 November 2010
As others have pointed out, Japanese publishers are still making more money than the Western publishers. Smaller Japanese devs may be struggling and the perception that the Japanese industry is struggling is more to do with the fact that much of Japanese development has migrated to handhelds. Console (software) sales are down overall but they still manage to make money.
The other issue is that in terms of technology, Japan is very far behind the West. Even the best looking Japanese games are only average on a technical level.
