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This isnt just about the japanese market though.
There are people across the world that enjoy japanese styled games.

When you give up japan, and trying to make those types of games, your also giveing up on those types.

Persona 5, World of Final Fantasy, Final Fantasy 7R, Ni No Kuni 2, Dragon Quest 11....

These are big titles for alot of people.
Sure they dont sell as much as Call of Duty... but I bet you they potentially sell alot of hardware.