Will Japanese based Game developers/publisher be here long?

[PAOerfulone]

Your friend is still right either way.

Because Japanese publisher and developers have IPs within their arsenal to survive and thrive off Japan alone, West alone, or Worldwide.
Dragon Quest may not be big or even get to North America. As long as it continues to do gangbustas in Japan and make profits, that's all Square Enix cares for, because they've got more money coming in than they do going out. That extra money they make back can then be used to fund and develop a Tomb Raider game that will sell very well in the West.

Final Fantasy & Pokemon are two of the biggest Japanese developed franchises in existence, and they both do in incredibly well in the West, Pokemon is even bigger in the West than it is in Japan.
Another one of the biggest Japenese game franchises is Monster Hunter, which is slowly but surely finding an audience here in the West. Animal Crossing, which sells huge numbers in Japan, does exceptionally well in the West.
Just because there's a franchise developed by a Japanese publisher that sells big numbers in Japan, but fails to match it in the West, doesn't mean that company is going down hill. They're called "Japanese" publishers and developers for a reason.
Call of Duty and Halo have never been huge in Japan, does that mean Activision or Microsoft Game Studios/343 Industries will die off? No.
Because those two franchises do such huge numbers in the West that they'll get by even without Japan.

You asked the question "Will Japanese based Game developers/publishers be here long?" The answer is yes. For reasons I and many others here just stated.
If you meant the specific IPs of the companies that don't do as good here, rather than the companies themselves, than you should've asked, "Will Japanese franchises that do bigger in Japan than in the West be here for very long?" Then you'd have an interesting question that can go either way depending on the company's actions and appeal of the IP.
But, as for the developers and publishers themselves leaving the West or going under? No way.