Honestly, I don't think most people care that much about where characters come from or where a story takes place; but I do think most people want their videogames, movies, or books to take place in settings they're familiar with. To a certain extent, being that the American market is so large and (many) Americans are ignorant about the world around them, this limits the number of potential settings ...
Canada has (maybe) 6 cities that Americans would recognise (Vancouver, Montreal, Toronto and maybe Ottawa, Quebec City or Calgary); and American's familiarity with Canada is (probably) an order of magnitude greater than any other country in the world. This means that your story has to take place in a world class city (London, Sydney, Berlin, Paris, Rome, Rio de Janeiro, etc.) in order for many Americans to have ever heard of the place; and many world class cities (Buenos Aires for example) would be familiar names to Americans but they wouldn’t have a clue where they are.
Of course, sheltering Americans from their ignorance only keeps them in the dark; and they will probably never consider looking beyond their borders as long as this continues.
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