Not really just western. Capcom nearly went under if not for RE and Monster Hunter from mismanagement of IPs. Konami before it became popular to hate them became a 3 IP company. CV,MGS,PES. Square while not in any real trouble keeps throwing bigger and bigger budgets at games then complains it didn't sell 10 million to make the money back.
It's mainly HD development. We have seen both Japanese AND Western publishers go under at an alarming rate since 7th gen. Just take JRPGs,the most popular genre in Japan. in the 90s there were more developers making JRPGs than you could count. Now? You can count on 1-2 hands. Yeah we lost THQ and Midway. We also lost Majesco,Artoon,Cavia,Cing,Gamrepublic and more.
The costs are really high and they need far more people to work on them. Did you know Breath of Fire on SNES was programmed by only a couple of people? This was not uncommon then. Now we have teams of 100 or more people working longer hours.
Nintendo is modest with it's budget,Nintendo doesn't dump 50-100+ million dollars into a game. Even Zelda or XCX high budget games for Nintendo,have a fraction of the budget FFXV or Dragon Age have.Level-5 isn't paying a cent. They are the ones being paid to make the games from others. I don't have a source but I think Bayonetta 2 for Nintendo is 20 million. That's pretty small in today's world. Again not confirmed.
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