Eurogamer

Resident Evil producer Masachika Kawata has responded to his former boss Keiji Inafune's comments yesterday that the Japanese games industry was in a "tragic state".

"As Inafune said yesterday, perhaps we Japanese developers need to re-evaluate," Kawata told the audience for his presentation about Resident Evil: Revelations on 3DS at the Game Developers Conference . "I agree with portions of what he said."

"The reason is that he used to be my boss, and if I disagree with him… I'm just kidding."

He said that the Japanese industry was financially healthy due to the success of social games in the country. But it still had an insufficient grasp of the current global gaming market, he said.

"I think we should be researching more, researching what the world wants and what sells around the world. I think we can study more and hopefully make more products that will be accepted and enjoyed around the world," he said.

Explaining that the side-by-side of The Mercenaries 3D and Revelations had gone smoothly and efficiently, Kawata also indicated that there would be more offshoot titles like these in the Resident Evil series alongside this year's Resident Evil 6, and he hoped they would surprise people.

"I hear that they're going to be releasing a Resident Evil 6," he joked, explaining that he couldn't say anything about it. "But in addition to that I hope that we can continue to do these offshoot titles and expand the IP more.

"I really hope that, moving forward, we'll be able to make new Resident Evils for new markets… that people really won't know what's coming."

http://www.eurogamer.net/articles/2012-03-08-kawata-agrees-with-inafune-we-japanese-developers-need-to-re-evaluate

i think it's a lack of focus on the Japanese market then a need to evaluate.

Lack of marketing too. I don't believe i've seen a single Japanese game commercial in a long time.

I don't know, when my next set in stone purchases are going to be Binary Domain, MGS HD Collection, the announced Deadly Premonition director's cut and MALICIOUS....I think they're doing alright.

Could they be running out of money to back their projects with marketing?

It's ok, but they should be careful with expanding they franchises. It's very important not to hurt them or they reputation. I don't want to see RE games "evolving" like Silent Hill ones (for example, SH: Book of Memories... It looks like a really bad joke). Don't evolve it too much, Capcom, mkay?

I read the thread title quickly and thought it was about Kawata Shoujo. Moving right along...

This is the Problem.
They try to think about what the world wants...For them the world means the USA - There is the wrong thinking.

When did they start to suck?
Exactly this Gen - When the rise of stupid FPS began
Alot of Companies say "We want to get Call of Duty Fans to like our game" - "We want to be successful in the West and so we need to change our formula in our brands"

There is the point.
Why did the people buy their games?Cause they were what they were
This CoD COmmunity they try to catch isn't intersted in Devil May Cry,Ninja Gaiden,Final Fantasy and all that stuff that changed so much.
The CoD Community aka a big part of the "Western" "Gaming" Community isn't even interested in games of the same Genre with 10 times more quality like Battlefield 3.
They just want their CoD,maybe Halo and Gears - What didn't change?Their fanbase still wants the games they learned to love so much.
Sales in Final Fantasy decreased a lot - FF13 sold a lot cause people were expecting a good game.They knew it better with 13-2 even if it got better.
This isn't anymore the series they wanted and couldn't wait for.

What does their fanbase want?The games they loved so much before this Gen - The quality aimed at their fanbase that were big enough...bigger than now.

Capcom is creating some stuff like Resident Evil Operation Raccon City that is directly aimed at the US Market to get some Call of Duty People.
Who is going to buy their game?No not the CoD people - Their still loyal fans but at some point even they will say "Enough" like it  happened with FF13-2 in Japan that even got beaten by Tales of (Xillia).
Bamco never changed directly their direction but they ignored their real fanbase > Sony side.They learned of that after they nearly had to shut down after the Vesperia disaster cause they tried to market it to the complete wrong community,even if it was at that time a lot opener to different genres.

All those Japanese Companies have to do one thing > Go back to the style of developing like they did at the PS2 Era.
Not even really back to Sony Only - No,go or stay Multiplat but don't aim that stuff at the audience in the USA.Aim it at the Japanese or European Community.
That way they would get their style,storytelling and of course their fans back.Cause they would sell more cause they get their fans back,make probably a lot more new ones who are just waiting for stuff that isn't aimed at the "FPS Community".
Than no matter how they change their games > People wouldn't even buy a lets say Devil May Cry if they Copy 1:1 Call of Duty.Not their fanbase would buy it neither would the aimed community do cause they DONT CARE.

Not really

The japanese game sales have gone down cause this generation 360 took off which was more of a western console.

Also the fact that economy really let the westeners to play multi-player games for hours,now that economy has come down in the west.The western gamers will also reduce as they will have to work more.

This is a solid post.

If I can add. Some japanese games or themes are redundant or sappy at times, that they can fix. Having said that, what you said is paramount. For them to continue catering to the audience that responds best to them and put aside considering the sales that the US illusionarily promises to offer, they can grow better.