Wasn't it second place last gen too?

Well it could be looked at in different ways. In Japan, where FF XII was released without the impending next generation looming overhead, the total sales of the game only dipped 500 thousand below FFX. Not exactly a huge loss. In America and Others it directly competed with two console launches and a series of new games to play on them and dropped 2.5 million between both regions. When FF XIII is released, it will benefit from being launched on current generation hardware and a large install base in everywhere but Japan, which may take a hit in lifetime sales.

Also to note, FF IX was swallowed alive itself by the fact that FF X media had been readily available well before the FF IX launch which took anticipation away from the game, plus the Playstation 2 was already released by the time the game came out. In addition, it was only affected again in Others and US regions as FF IX sold comparitively well to FFX in Japan.

So let's look at this:

1. Both FF IX and FF XII were released in their worst selling regions either right before or after next generation hardware was introduced that would play known future entries in the series.

2. Both FF IX and FF XII were released after media hype had begun on the next entries in the series(FFX and FFXIII). Would you expect GTAIV to sell well if 6-12 months beforehand Rockstar introduces the sequel with trailers and hoopla? It was a cannibalizing situation for both games, and the sales are evident that tactics like these do not work outside of Japan.

I don't think so. The whole company's success solely relies on one man- Akihiro Hino. If Hino leaves, Lvl 5 will fall. Even S-E has other people to do the job if Nomura leaves.

nomura its the 5+ million seller if put on a main series.

man dont kill his excitement, let him enjoy the new second place and the triumph of the x360 that has achieve so much by climbing ... oh wait is still at the same place, well at least is getting back at sony for making them look bad last gen. i guess if that 720 reaches first place hi'll have a heart attack.

@Onyxmeth: I think it was a combination of that & the style of FF9 / 12. The characters weren't done by Nomura, and in general it doesn't give off a very western appeal. I think that has a pretty big impact, just compare the western sales of Blue Dragon to Lost Odyssey. The characters just aren't "cool" enough.

I could be completely off, though.

I have them on my radar since Dark Cloud.

Had they not developed DQ VIII it would do far worse...