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Well the Japanese big guns for this gen are yet to be shown (FF, MGS), and I think Japanese designers tend to use creativity over graphics...

But I think its becoming clear form the sales in Japan that they don't necessarily award interesting level design, multiplayer evolution and good story telling, not by our standards anyways.

For example, the 2007 game of the year just about anywhere... Bioshock... sold really poorly there but I doubt it will sell any better if released on PS3.

I think the complete package of GTA4 will be so far ahead of anything coming out of japan (technically) that they won't be able to make a similar product for many years to come. Wether that makes a better game (being technically advanced) I am not too sure.