He is not talking about Nintendo. He is talking about the rest of the Japanese developers motly. 

"Yes, there are amazing games, just not enough of them... So many are based on anime or fantasy - games that only appeal to Japanese people. Most gamers overseas aren't interested in anime," 

I can hardly see how adding budget would completely Westernize games at all. Just add more in many areas to make them better.

I spend most of my time playing Western games this generation which is the first time I have done so since the second console generation. The problem isn't that Western blockbusters are so good, it's that Japanese games have become so bad. One of the biggest problems is the fact that many Japanese studios are still struggling to develop for the PS3. The other major issue is pandering to what they perceive Westerners want. I believe that Mikami's advice is not only bad, it's the opposite of what should be done to correct the problem.

I agree with your thoughts except for the last part. He mentions many traditional Japanese games this gen he considers of high quality. Doing the opposite of what he is mostly  suggesting would be to spend less on budget. So what exactly are you saying would correct the problem?

And, I think it is a pipe dream to expect one country to continue to dominate the gaming industry. They have more competition now and their goal should be for more profit and not trying to dominate a huge industry that will be impossible for them to dominate again. 

Let's see, Mario is dominating the world. Street Fighter has made a huge come back. Resident Evill still sells amazing. Gran Turisimo still sells amazing. Metal Gear Solid 4 was huge. Final Fantasy 13 sold amazing. Where's Japan lagging? Japanese developed games were as they are now, for every Final Fantasy, there was always a Threads of Fate. I mean there are misses, but that's with every dev, including "western devs". But I think the biggest problem is that people think that all the big blockbusters for the last 2 gens were Japanese made, but they weren't. Tomb Raider sold just as many Playstations as Final Fantasy did. Grand Theft Auto sold more PS2s than Metal Gear did.

If you look at the huge franchises from 15-20 years ago, the ones that are still strong today, they're all Japanese franchises, and only the ones that become too westernised or too big-budget end up weakening. Final Fantasy peaked somewhere between 7 and 10 (opinions vary on this), as the budget for the games continued to grow. Resident Evil seems to have peaked at RE4... RE5 and RE6 both look like they'll perform more weakly, due to increased budget.

While it's true that the tendency to work with anime-type IP is harming their popularity outside of Japan, the essential Japanese-ness of their big games is one of the big draw points, that set them apart from Western developers.

Here's something to consider - one of the bigger recent franchises is a split-off from Rayman. The Rabbids franchise is exactly the sort of thing that should be coming from Japan - it's just so zany, unrealistic, and focused on fun. But imagine what, for instance, Square Enix would have done with the idea - the Rabbids would have looked very "realistic" with ear physics and fur simulation, there would have been heaps of dialogue, and the gameplay would have ended up being very bland and formulaic.

Another example of what SHOULD be coming out of Japan is games like Red Steel - games that try to put a distinct Japanese spin on classic western genres. Again, though, imagine what current Japanese devs would have done, and you'll see the problem.

There are certain genres that the Japanese developers stick closely to - the RPG is the biggest of these. And that's part of the problem - when you have an entire nation of game developers making pretty much just one genre, there's going to be massive competition, and sales will be weak for all of them. And then only half of them make it out of Japan, with relatively little fanfare.

The talk about Japan following the "hollywood movie model" scares me - hollywood is formulaic, has oversized budgets, rejects innovation in favour of what has always worked, and prefers gimmicks over substantive changes. And I think we all know which publisher fits that description. What Japan needs to do is follow the Japanese tech industry, known throughout the world.

And his view is actually why Japanese games are behind western games.

The "Hollywood Movie Budget" strategy is basically what turned Square from a huge successful japanese RPG company to staggering mess.

The Japanese are behind the US, not because of budgets... but because the Japanese make Japanese games.

Japanese games aren't the huge genres anymore... there design structures have fallen out of favor with most newer players.

They shouldn't be trying to spend tens of millions to make niche games or make pale copies of western games.

They should keep making their games, but shrink their development budgets.  Do what they know, and just stay "2nd place".   Wait for tastes to change, or to develop something distinctily Japanese that captures the publics imagination like FPS and WRPGs.

So Japan should be Ubisoft?

AKA French

No, I'm saying that Ubisoft has managed to out-Japanese the Japanese. Japan should have gotten there before Ubisoft did, and should have made superior games similar to those that Ubisoft made. Both Red Steel and Rabbids did moderately well... had they come from Japan and made in the way Japan USED to make games, then they would have been much bigger and more popular.

I suppose I just noticed how Ubisoft seemed to be able to make those games, when Japan didn't. It leads me to wonder if Ubisoft have been studying Japanese games of old. Note that ZombiU looks to be what Resident Evil has lost, too.

That is an interesting point of view, but judging by the non Nintendo games of the type from Japan's sales I don't think that is true. Plus Red Steel 2 bombed hard

You'll notice my emphasis on the word "used" - Japan has lost what made it great, and that was my point. They're trying to look for a new way to become popular, what they actually need to do is find what used to make them popular 10-15 years ago.

And I specified Red Steel for a reason - Red Steel 2, as good a game as it may or may not be (I won't be drawn into that discussion), is not really a game with a Japanese kind of feel. And it bombed hard primarily because it used the Red Steel name while being very different. Those who liked Red Steel were turned off by the dramatic change, those who disliked it didn't buy the "sequel" because they disliked the first one. They would have been better off giving it a completely new name. But that's all beside the point.