It seems to me like many Japanese RPG developers have shifted towards portable gaming (which is probably a combination of their home market, their economic situation, and probably other factors), with only a few of the bigger developers finding success on the home console market.
While I don't think that Japanese RPGs will die off, I do think that the few, existing Western RPG developers will likely continue to be more popular outside Japan. With that said, even the fighting game genre is still chugging along, with its competitive tournament scene interestingly growing larger than when the genre had mainstream popularity.







