So I've been thinking a lot the past days and being that TGS is going on, my mind wandered to JPRG's and why most of them suck compared to the glory days. And then I saw a shiny Portal 2 trailer and my attention was diverted.
A while later I got to thinking about the great RPG's of the NES and SNES days and Portal 2 and realized something.
See, back in the NES, SNES, and even to a certain extent the PS the action/popular games didn't really have a story or at most a joke of a story. The technology really wasn't there to have the gameplay and the story. Go back to the NES and most games tell their story in the instruction manual or two screens at the beginning of a game. Look at the SNES and it's largely the same thing except for games like RPG's. Look at the PS and things are starting to develop but early on it's much the same situation.
Now look at todays games. Look at your Halos, Gears of War, Killzones, Portals, Bioshocks, Uncharteds, and every other popular action game out there. Technology has changed so that these games can have gameplay and story.
So where does that leave JRPG's?
During the SNES days, JRPG's didn't have to worry about gameplay and many had terrible gameplay because they could rely on story. The game itself could be bad but that didn't really matter because the story could make up for it. Today, since the action games have caught up to RPG's story wise, things have changed.
While action games have changed, JRPG's have not. They may dabble in new things to make them seem like an action game, but they're still largely the same thing they were 20 years ago. Even if a JRPG came out today that had a story and characters as strong as your favorite RPG from 15-20 years ago, the game wouldn't compare to the action games of today.
Action games have been able to take the new technology and embrace change. In what was once a setting where even the most complex stories could be boiled down to a few sentences now have rich narratives and highly polished game play. JRPG's have not taken that step and are barely willing to take the step to embrace the new game play people actually want.
So in short, action games have caught up to JRPG's in the story department, JRPG's have not caught up to action games in the gameplay department.
That is why JRPG popularity is dying.