I don't agree, Europe and North America are both bigger than Japan. Japan is however again over-represented this generation, Nintendo games including the most popular franchise in history Mario. The top 10 of worldwide sales this gen is dominated by Nintendo!

Add to that game series like Metal Gear Solid, Final Fantasy and Gran Turismo and Japan representation this gen is over the top.

Although I agree the technically most impressive games so far this gen have come from western teams, with games like Killzone, Uncharted and God of War. Also for distinguishing efforts with games like Heavy Rain, LittleBigPlanet and Warhawk western developers are performing well.

Population arguments are also quite valid here. You're comparing > a billion people across North America and Europe vs around a hundred million on a fairly small island. The fact that Japan still holds so much sway speaks volumes about their ability to contribute to the industry.

And you forget Mario and Sonic at the Olympics.  It's bigger than Resistance, Motorstorm and Uncharted combined.

I didn't so much neglect it as decided against opening the pandora's box of "what constitutes new IP" You might as well have said that you overheard someone saying that Kingdom Hearts 3 will be Iphone exclusive :P

Although if we are claiming MW2, FFXIII etc as new IP then it is definitely fair enough 

OP: Oh yes, western developers are making "HUGE" new IPs, and if you've looked at most of the western financials as of late you'd see they're bleeding themselves dry in the process. Japanese companies seem to generally be playing it smart this gen releasing either smaller niche titles or blockbusters in established and proven global franchises. If anything, this gen has been thoroughly dominated by Nintendo, both on handheld and console. As for myself, the day the Japanese stop making games is the day I quit gaming. I absolutely abhor western games, with few exceptions.

I have 2 Japanese games to like 13 western... :/.

Surprising as I've always prefered the Japanese stuff, this gen has just been poor for anyone but Nintendo. Doesn't feel like anything has come out of Japan that can be put alongside Metal Gear Solid, Final Fantasy, Resident Evil and such like >_>.

Sigh.

Even for you, 6 out of 7 of your Nintendo DS games were made in Japan and 8 out of 9 of your Wii games.

My collection says 9 out 23 on PS3 are Japanise.
However that's misleading as i have sold already 5 or 6 titles from it and ALL of them were western ones.
So far I haven't bought Japanise game which I would like to throw on ebay after few hours.

So to summarize Yakuza 3 might suck on graphics level when compared to western game but it's Yakuza which you can't stop playing ;)

I can't believe there are people who think that the Japanese developers are better then the west. First off, their JRPGs this gen have mostly mediocre at best with a few exceptions. Also, FFXIII has become one of the most controversial games in the series. Nintendo games are good but other than that. Japanese developers really dropped the ball.

I think most of the small Japanese developers are probably making shovelware for the DS and Mobile phones.