Famed game designer Keiji Inafune recently addressed the current state of Japanese game development, saying flat out that they aren't where they need to be and any belief contrary to that is just "wishful thinking."
Inafune told IGN:
Some developers are saying [the] Japanese game industry is still doing fine, but that’s wishful thinking. Words are not enough, we must act and prove it. Unless at least a few titles from Japan make it to the top 10 games of the year worldwide, we won’t prove it.
I hope Japanese game developers are breaking through the stagnation. However, the reality isn’t as good as I want it to be. I see they’re starting to be aware of the problem and that they have to do something.
They know they have to learn more from western games and create games that’ll sell more in the western market. However, they don’t know what to do or how to do it. Even worse, their pride gets in the way, preventing them from learning from overseas developers. As a result, they end up staying in the domestic market rather than going global.
It's no secret that Japanese game development isn't nearly up to snuff with what it once was, as Western-developed games have taken over globally. Will the region ever be able to get back on track? Is Japan destined to create niche games that only satisfy the Japanese market? Let us know what you think in the comments below.