when you look at the last generation and you consider games like Katamari Damacy or Okami you do see the Japanese have the ability to make creative and even charming games. (Sure they might not be run away successes commercially but that's no different to Psychonauts, Beyond Good & Evil or Prince of Persia released the same year) The key difference is that the east has seen arcades and consoles as the focus and the west has seen PC and Console as the focus. Certainly this generation consoles have become a bigger focus. PC developers are either moving to consoles or porting their games to multiple platforms (Epic, Bioware, Valve and id for example.)
This has seen a rapid adoption of features that up until the Dreamcast/Xbox weren't assosiated with consoles before. Hard drives, online play, custom soundtracks, messaging and social features, consoles becoming a part of our home network and even the ability to save anywhere the player wishes. When I read news about Xenoblade and it's big features are 'save anywhere' and basically a wait/fast travel system Bethesda introducted years ago I can't help but feel the Japanese are just a bit to slow to embrace the shift. As far as appeal goes since the PS1 days the mainstream Japanese games (especially action and RPG genres) have been relying far too much on spectacle and far too much on anime cliches.
Sorry Japan but we don't love you like we did in 1997.
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