I think the majority of us already think the Japanese gaming industry has gotten stale, so this isn't anything new. If it wasn't for Nintendo's gaming studios Japan would be almost completely irrelevant to most of us (not all, but most).
As for SONYs studios, SONY Japan and team ICO can produce some top-quality games, but they take an unacceptable amount of time this gen and desperately need to get their shit together.
As for third party, the easy breakdown is: Compile a list of your top 10 games this gen. How many are Japanese? Now do the same for the last gen and the gen before that, and the gen before that. Almost everyone will have a lot less Japanese games in their list this gen then any gen before. Infact I think this is the first gen ever where most people will have a huge amount more western games in their list unless you're a Nintendo fan.
