It's certainly an interesting topic to delve into but I'd like to wait another year until we can see for Skyward Sword and Ocarina of Time 3D fare in Japan before I develop a proper theory. Remember that Nintendo focused very much on the West with Twilight Princess after the cold reception to Wind Waker and that could very well have had a large effect on the Japanese market. It may also be that the Japanese feel that Zelda has simply been a rehash of Ocarina and unlike the West, don't buy the game because of that.

Who knows.. I guess you'd actually have to ask the Japanese or wait until we can see the reception they give the two Zelda titles next year to get a good idea of what's gone wrong.

But if you go look at the highest selling games of all time in Japan. 8/20 top selling games of all time are DS games.

But that doesn't explain why Zelda is down. As nintendo's been one of the more if not most successful companies attracting new gamers in Japan.
I mean though, I don't know zelda why zelda is down in Japan.

It's very clear to me : change of demographics. The N64 still mantained some of the NES and SNES demographics a thus Ocarina was a huge success in Japan. After that the Nintendo fanbase has been changing considerably, and you could say japanese Nintendo fanbase changed even more. It may be that during the PlayStation 10 years of dominance and the following portable uprising in Japan, the Zelda brand lost much of its strength and appeal. Fanbase got dispersed and not as many new Zelda fans came from the post-Ocarina era. Right now the Wii doubles the PS3 installed-base in Japan and then some, but the demographics are not what they used to be during the 16-bit/32 bit era transition. It's very known Nintendo newfound success with the Wii was in attracting lots of consumers that weren't part of their old fanbase (or any fanbase at all), so it's just logical some games wouldn't appeal to them. And it happens Zelda is one of them.

If you blame demographics, then you hold that Zelda's appeal is more or less constant?

Constant, but diminishing. And let's not forget it's still Zelda we're talking about here.

One other big factor to consider for TP in Japan is that it was a launch title on Wii and a final curtain call on GC wheras all other Zeldas were released near the console speak period.

Granted, but the negative trend remains even if you remove the outlier of Twilight Princess.

I think it's because Zelda is so un-Japanese in style.

When Zelda was in 2D there wasn't a clear distinction between Western/Japanese style because back in the '80s all big games were Japanese.

I wouldn't call Zelda Westernized though. It's more like neutral.

It's a big shame Japan abandoned Zelda.

First off, I think it's worth noting that Japan really seems to like the black sheep of the series, Adventure. Adventure focused on combat over puzzle solving and had RPG elements. Considering how people say that Zelda has focused more on puzzles lately, I suppose that can hurt.

Twilight Princess is obvious in at least one respect. The Japanese don't care for the realistic art style. Then again, that can't be all of it: the N64 games did at least as well as WW percentage wise, and their style was much closer to TP than WW. Prehaps the fact that it was a launch title actually hurt TP; by the time there were a lot of Wiis, it started getting competitors, both on the Wii (Monster Hunter 3 has often been compared to Zelda in Japan) and elsewhere (Monster Hunter's enormous popularity on the PSP prehaps?)

Actually, the Monster Hunter thing might be worth looking into. Could the more recent games be sabatoged by them, due to genre overlap? Or maybe the Japanese really perfer their 2D games, which is why the handheld titles have been more popular since the 3D jump. Remember how popular 2D Mario is compared to 3D Mario in Japan.

Just brainstorming.

do young people play Zelda?

I know i'll always play zelda, but i've been playing it for 20 years... maybe that's the problem, it's not attractive enough to the younger gaming audience.

I know a kid (18) who was all "zelda zelda zelda", he never had played one before though, so was only hyped because people told him it was great.

That's just a suposition....

(I mean no blood, no gore, somewhat monotone rythm to the game... it's no gears of war that's for sure)