Japan is the land of the fads and consoles just ain't cool no more. And that means no one buys them. You buy your portable and your non-games and you conform because it's Japan, DAMMIT! That's my rather crude and largely ignorant view of Japanese culture.

It always seems in that past that while multiple consoles could co-exist in America (even with one clear winner) in Japan it was like THIS console sells and everything else is niche. Or how such-and-such game was a huge hit in America but bombed in Japan and the excuse is that it's because it's not Japanese or it's not a popular genre over ther. I was initially like "but this is a good game and it can't find even the slightest audience there?"
I used to have a major interest in pro wrestling and Japan has a strong pro wrestling culture. But apparently MMA has significantly stolen the pro wrestling audiences away over there. I've also looked up Japanese baseball out of curiousity and apparently the introducing of the J1 soccer league has affected the bottomline and taken away fans. Huh? In North America FOUR major sports leagues co-exist with some cities having teams in all four sports and with local fans supporting all four teams. Whenever I look at Japan trends it seems like ONE thing is incredibly successful in its field and everything else struggles. In America demographics play a major role and something can find an audience even if the mainstream isn't into it. And American culture holds a lot of value in individual freedoms, which makes sense considering the history of the country.
Of course the major cultural gap I don't understand is why the Japanese companies give a ****. Japan's population is 127,470,000. The America's is 308,652,000 which is over TWICE that. Plus the North American market also includes Canada which adds another 34 million. And Europe has similar taste to North America as well. The UK has a population of 62 million, Germany is 81. And those are just the European countries I know for sure have strong videogame markets. So if you've got two markets and the Eastern one is fickle but the Western one is not and is at least three times the size and yet you put all your concerns in the smaller Eastern one that is HARDER to please? See that must be a culture thing because in the West businessmen look at the bottom line and focus on where the MONEY is.
You want to make console games? Then you focus on where people buy consoles and that's the West. Don't waste your time catering to a market that is no longer interested.