A few years ago, the exchange rate was as low as 75 yen to the dollar. Now, it's 120. This, of course, has a huge impact on revenue for Japanese software developers who release games abroad. There are even some expectations that the yen will go as low as 140 yen to the dollar.

Japanese games are usually budgeted lower than Western ones, because programmers' salaries are lower in Japan and because outside of games like FF they put less emphasis on graphics.

Let's assume an average budget of ¥2bn yen per game ($28.6m then, $16.7m now). If a publisher gets $30 per game sold abroad on average, they would need to sell this much to break even (without Japanese sales to make it easier):

889,000 games before (historical low)

556,000 games now

476,000 games in the future? (at 140 yen per dollar)

As you can see, the exchange rate has had a huge impact.

Not only that, but smaller Japanese developers that release PlayStation exclusives will have a bigger install base to sell their games to than last gen, making profiting even easier.

For bigger, multi-platform studios like Square-Enix, it means they can pour more resources on games like FFXV, knowing that they are more likely to profit from it. When FFXIII released, the exchange rate was at 90 yen to the dollar. They sold 5.46m games abroad, meaning a revenue of ¥14,74bn. Now, that figure would be ¥19,66bn. Over ¥5bn, or 33.4% more in revenue.

So, here's hoping we see more localizations, more console releases and bigger Japanese games.

interesting, would love to see every Japanese PS4 game localized and even the new PS3 games like the Hajime no Ippo game and the new Shining Resonance, hopefully this helps those dreams come true.

Very good point, i think western publishers should take advantage of that and open up more studios in japan. Japan made game design already dominates but they are much much cheaper now too.
You allready can see how easy it is to fund amazing looking japanese games like bayonetta 2 and bloodborne if you are nintendo and sony. I think this generation will be niponmination.

Yeah! We can play like it's 2007!

Hopefully this encourages Tetsuya Mizuguchi to make his glorious return.

In all honesty, pretty much any Japanese developer should aim for a global PS4 release, localization costs can't be that big.

Aside from the weak yen, the worldwide PS4 install base is almost 20 times as big, they can't oversee that chance.

Localize all Digimon games avalible!. If NamcoBandai doesn't use the oportunity of the return of the anime plus more possible benefits, it would be really sad.