While I agree that it's too simplistic to pull on the tempting explanation japanese men have become basement nerds interested in hentai and sex dolls, it's true that a large part of the populace do have a relationship problem perhaps not faced anywhere else in the globe. A quarter of those over 30 are virgins, and if I recall correctly, on western countries, those who are virgins after the same age are statistically insignificant. There are probably more than a few women who simply give up because they can't find a proper mate.

I agree with slimebeast that the best solution would be for the native women to attain a final birth rate just at replacement levels or as close as possible to it - not as difficult as it sounds, for even in modern society, most are willing to have children at some point in ther lives. The secret would be to implement social programs like those of the town of Shimojo at a nationwide scale.  A challenge considering the national debt, but hey, than can do it. It's Japan we're talking about, after all.

Part of the problem is that women refuse to marry because they do not want to have children and stop working + they have very high standards and you can read about minimum income requirements that women set. It's not easy for find that mate without being rich or having some sort of connection.

I don't know about that, it's a pretty well documented thing. All of the factors in western countries that have contributed to extended adolescence and aging populations seem to be present in Japan as well, only more extreme. (They always have to raise everything to an art form.) While I was being flippant, I do think the explosion of moe is a popular culture expression of... well, something that's not entirely healthy.

So moe culture has led to over 50% of girl aged 16-19 to have no interest in sex?

Like I said, I think it is one symptom of the real problem (self-indulgence, escapism, effeteness, etc.), not a main driver. It might be a factor in the self-perpetuation of the problem, but a minor one that would be replaced by something else if it didn't exist.

But it is fucking up games something fierce.

I really don't think it's changing much of anything. There's always been low budget games and media that relied on a lot "cute" characters and tropes. You just hear more about them since the internet gives everything more exposure.

There's a rather infamous email/blog post that was made in 1993 about how anime and games were being ruined by creators getting lazy and relying on cute characters rather than plot or substance.

I'm a bit biased though because I separate quirks or style from the quality of the game. I can enjoy it regardless, because if it's good, it's good. I know there's plenty of people who refuse to play or watch something because of an art style though, so I suppose it just is what it is.

I know it has always been a thing (I played Princess Maker before it was cool!), but it seems like it makes up a larger share of Japanese games than it used to. Whether that's because it has just matured more into a market unto itself, because there has been a general loss of confidence among Japanese devs with all the tumult and upheaval of this generation that caused them to become more focused on their home market and especially this very lucrative niche, or I'm just perceiving something that isn't really the case, or something else entirely, I'm not sure.

It's a regional variation of the problem confronting retail games as a whole, namely that an unspoken stagnation in the market forces them to be more conservative and focus on fleecing the core market who is more willing to spend a lot of money (and again, an art form in Japan. I remember a collection for Fate Stay Night on Blu-Ray in Akihabara that ran for something like $600 US), and then that creates an inward-focused market spiral.

Yeah, it's problematic though - in Japan a man with a relatively high income will often work long hours and barely be able to take part on child rearing. But I don't know, even for a eastern country they still shy away a bit too much from relationships, I still think a little more kinkiness would help, lol. 

How can you expect a developed country like Japan to consume more with it's aging population (23% are over 65) who have little space to expand. As crazy as it sounds, maybe a little de-growth or stable state economy (economic growth isn't infinite) is necessary until the population stabilises at a much lower level than it is now and so can enjoy a better quality of life as they are not so overcrowded