I've heard it said that 3H underperformed in Japan and that Fire Emblem is becoming more of a western franchise of late. I'm sure worldwide sales of 3H have been stellar, but I'm curious why this shift would occur, and what about the game disappointed people in Japan compared to previous titles.
It's not so much a shift as it is growth in regions where growth was and is still easily possible. Fire Emblem has been a known entity in Japan since its inception in the early 1990s and the country has seen no population growth, so successful entries over the years have ended up with similar sales. But in America and Europe, Fire Emblem had not been marketed with much effort until Awakening, so that's when the jump in popularity first happened. This development's only logical outcome is that Japan's share of global sales decreases, but that doesn't mean that Japan's performance is worrisome.
The focus on Japanese sales of Three Houses is due to it being the only country with widely available sales data, however, it has yet to be learned what the digital share of its sales is. Awakening released before Nintendo made it common practice to have physical and digital versions available on day 1, Fates released at a time when the digital share was considerably lower than it is today. Three Houses also happens to be the second new game of interest after Nintendo's voucher offering was made available, so that's a factor that pushes the digital share even higher. While the total numbers (physical plus digital) will probably show a decline compared to Awakening and Fates, the difference won't be as dramatic as the physical-only sales data suggests at first glance.