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Nem said:

I'm sure there is a place for the in handhelds in Japan. The problem is everyone is trying to come up with the next multi-million seller Monster Hunter and failing at it.


Oh, I definitely agree, there is a place for them on handhelds.  But as you say, bigger publishers aren't interested in chasing the small RPG crowd, they want the Monster Hunter crowd.  Which is a shame, because smaller companies like NIS/Compile Heart/Nihon Falcom/Gust get by just fine on the small RPG crowd.  If you dedicate appropriate resources to it; it can be profitable.