Its most likely because its much harder to develop for these HD consoles than the ones of old. THere more expensive to produce for and they take longer to make. FF13 took how long??? JRPGs seem to be victims of technology, in the PS1 era you couldnt look on a shelf and not see a dozen JRPGs and it doesnt help that WRPGs seem to come out of nowhere on the consoles. Its no wonder why you see so many on PSP & DS, but to me thats a poor substitute for the great cinematics that only a home console JRPG can bring (dont know why there arent a slew of them on Wii, either)

Just because Square and FFXIII are shambling along doesn't mean the entire bloody genre is going to hell. Atlus for instance is the critics' darling with the Megaten series that has spawned a significant following and there are a TON of smaller, indie titles like Rune Factory, Knights in the Nightmare, Disgaea, and Tactics Ogre. Granted, it seems that the only one that people mention or even notice is FF, but I guess that's how the cookie crumbles.

The same old crap excuse can't be the sole reason since there is always a new generation of gamers coming in.  Most kids today probably haven't even seen an SNES or PS1 in person before.  

But that's basically what defines the JRPG genre - grinding and the teenage boy goes on a quest to save the world premise.  It's almost like bashing FPS because there's too much shooting.

There are a lot of JRPGs this Gen on PS3 you just have to import from Japan. 

Good point!

I guess newer gamers aren't intrigued by the dated gameplay found in JRPGs.

Older gamers are tired of seeing the same old crap.

Eitherway, the cliche JRPG formulas aren't working anymore.

Yes, because while the West has been learning from Japan, Japan has not been learning from the West.

I've written about this before but I say this because if you play a JRPG you see a cut scene of some fantastical thing and then you're playing a JRPG.  The cliche about JRPG's is gameplay doesn't matter, it's the story and characters that matter.  That was true in the 90's but that's different today.  In the 90's we couldn't do the awesome stuff you could do in cut scenes and turn based pressing A was acceptable. 

Now, things are different.  In the 90's the West ignored story and made up for it with gameplay BUT they also knew people wanted more in terms of story.  Flash forward to today and we have your typical Western game with all the action AND the story and characters.  So we have all those things we see the characters doing in the cut scene of a JRPG but the player is doing them.  Ontop of that, we now have these action stories that can match that of the JRPG's.  It's the best of both worlds.

Looking at the JRPG's, they still have the boring repetitive gameplay that people only tolerate because of the story.  JRPG's have just been all around reluctant to change and that's the problem.  They still have these fantastic cut scenes of the characters doing amazing things but then you move to the same old boring gameplay.

In the first 15 minutes of a Western game, I'm introduced to the story, characters, and probably already done something really cool.  In the 15 minutes of a JRPG I'm lucky if I've done more than press the start button.

As long as JRPG's continue to refuse to change, they're going to continue to dwindle in popularity.

-edit-

Note that I'm talking only about consoles.

Dieing? No

In a slow period? Yes

They will come around again in time.

It could also be that all the good JRPG's this gen generally don't leave Japan so we are left with shit like FFXIII and the Last Rebellion.

I don't think so. The big names sell well and the other series get the scraps. Yes, there has been an overall decline on consoles from last generation, but a lot of that is due to the market shifting to portables.