You need to go back and look at what all the different markets are doing.  What are the best selling games in Japan?  Games with Anime styles or influence.  DQIX, Final Fantasy, Monster Hunter, MGS, Pokemon, Mario, Tales of etc.  Where in this list are 'Western Games' taking over or even showing an influence?  Japan has shown overwhelmingly they dislike the 360, only buying games on the system that cater to Japanese tastes (Lost Odessey, Blue Dragon, Tales of Vesperia, Idolmaster).  They skip over ALL FPS, even Japanese developed ones.  They don't like WRPGs.  They don't like Western made action games.  The only western based games they seem to like are those based on Western movies or series.

I have no idea what basis you're getting this theory from at all.

Same, I don't see the change in Japanese gamers' tastes. Except for the huge shift to handhelds, and those handhelds are stock full of the games previously on the consoles.

Then again it's not just the portability of the handhelds (though convenience is a factor) but this gen introduced one wildly popular console whose controls and marketing direction focused on different things, one very expensive console that failed to deliver their games for years and a Western console that got the push when it put some games of interest to them.

Western-oriented games still do very little in Japan, and while the game market there might be getting smaller, be it aging population, economic difficulties or other factors, it hasn't shrunk too significantly when handhelds are taken into account. The importance of Japan in the industry has lessened a lot but that is mainly due to the expanding market outside of Japan, and the competition Western developers have shown.

And my point is that the huge majority of tries to restyle games to appeal to Western gamers will fail against the Western competition, and then they'd lose both crowds.

Well, yes, games do tend to get old if you replay them constantly...I mean, I love Oblivion and Fallout 3, and have sunk 200+ hours into each, but it's for just that reason that I'm a little tired of them.

Anyhow, that's not really the gist of your post, so let's cut to the chase. You feel that the JRPG environment has grown stale and cliche, in contrast to the WRPG arena. Tell me, which JRPGs have you played recently, and which WRPGs have you tried?

maybe they should take a hint and reinvent the JRPG. WRPGs are getting it right and are more appealing to a broader audience.

Yet again, there's more JRPGs than just Final Fantasy.  Don't lump them all together based on your experience and say 'they aren't doing anything new'.  Also, what makes WRPGs the ideal?  JRPGs sell WAY more than WRPGs, there's many more varieties of genres in JRPGs and there's 100 JRPGs for every 1 WRPG.  The simple fact is, RPGs in Japan are a major industry.  RPGs in America are a new fad, revisited after 15 years of neglect and bad sales.

I'd actually argue that if you want to point to a JRPG series that has reinvented itself recently, Final Fantasy is likely it. XII plays differently than all the others, and XIII also appears to be different from every other game in the series. Mind you, there appears to be plenty of reasons to avoid XIII, but "it's more of the same" probably isn't one of them.

Actually the reason people are flocking to XIII is because its returning to many of the gameplay and design characteristics of the past titles, mostly VII.  However yes, FInal Fantasy use to be a series which altered itself often.  The problem is, fans of the series itself were hte ones who complained whenever Final Fantasy tried to alter the gameplay or alter the flow of the game (speaking specifically about games such as FFVIII, X and XII).

And Final Fantasy aside, there's plenty of JRPG series who are reinventing themselves or improving on their game design.  Also, its pretty weak to be saying JRPGs are bad for not changing enough when WRPGs have gone through a total revival and change recently just to get noticed.  5 years ago, no one even thought of WRPGs at all aside from PC fans.  The only reason people are now having this big fight over 'WRPGs vs JRPGs' is because a few select companies actually took the effort to revive the genre in the west and create some original top quality titles.  Whereas, like I said before, RPGs have been popular and consistently one of the most successful genres in Japan for almost 25 years.

Just because you like 'WRPGs' better than the ones made in Japan doesn't mean the ones made in Japan are inferior or they should change their winning formula to fit your tastes.  Its been working for them for a lot longer than you probably have been into RPGs.  And once again reverting to the main topic of this thread, its not the reason Japanese games aren't doing as well in America.

Only 8% what a same. I always thought japanese gaming companies were successful on a global scale

The only way for the sales of these games to increase in the west is to have a more western appeal. MGS4 did it with FPS elements and splinter cell over the shoulder shooting and now Capcom is doing it with Dead Rising 2 by giving a western developer ( Blue Castle Games ) a shot because there were alot of complaints about DR 1 gameplay by the western crowd. It seems Capcom knows what is needed to make their games a success in the west.

Koei really has no one to blame but themselves.  They basically have two titles outside japan, Romance of 3 Kingdoms and Dynasty Warriors and keep remaking them over and over while sales drop lower and lower.  Changing the titles doesnt fool anyone (bladestorm, Gundam and Samurai Warriors come to mind).  They are more of a one trick pony in western eyes than factor 5 was.  The sad part is they actually do have a rather diverse portfolio, they just dont release them anywhere else.  Perhaps they are not confident in taking risks or just really dont care about sales outside Japan.