I think you need to look up the definition of "innovate." - To create something new like ideas, methods, or devices. Every single popular Japanese game in existence today was a rip off of american/euro games from prior days. The only difference is the Japanese games were popularized due to consoles which is why they are so prevalent in societies mind. But lets not sit here and call them "innovators" because they are not. The Japanese are a great people who excel at hard work and improving ideas by iteration but they have never been known to innovate anything. In video games specifically, everything is a copy of something someone else invented so its no wonder that they are always "behind." Hell even consoles themselves were a western invention that the Japanese kept building upon. I will give this to the Japanese (who I actually love as a civilization), they have great work ethic, good organization, and lots of determination. The west on the other hand is the land of invention and innovation however we are controlled by corporation and profiteering thus many of our inventions are not fully realized nor utilized to their fullest potential. However, the west is most certainly the modern innovative center of the world (along with a few Euro countries).

A quick VG history lesson:Before Final Fantasy was even fart in someones backside, we had games like Akalabeth (Ultima) & Wizardry (years before DQ or FF) which basically led to the console rpgs. You will note that both Ultima I and Wizardry were 100x better than DQ or FF in almost every way but most gamers dont know that because our parents mostly didnt have computers nor knew anything about their operation (which made gaming out of the question).I loved Chrono Trigger as much as anyone but... seriously aside from story, how was it any better than any other console rpg at the time? It wasnt. It was the same thing and when you consider what was available on the PC at that point in time as a comparison, you will quickly note that Chrono Trigger was a babies toy (Disclaimer I was just a kid as well back then). But back to point, CT is just the same darn thing rehashed. No innovation at all. While the Japanese were killing themselves to make a good FF/DQ clone, the west was already making games like Warcraft II, C&C, Myst, XCOM, Civ etc. Hell just 1 year later Bethesda released Daggerfall... how can anyone compare that to anything console until the XBox (Morrowind) and keep a straight face?The japanese made a lot of great games via hard work but innovators they are not. 

Maybe Im wrong but i dont feel western games like a challenge nowadays. If we talk about the online features and MMO, western games win, but if you are a hardcore gamer used to singleplayer campaigns, japanese games are for you.

Innovation doesnt always led to a perfect game but i prefer buying FF XIII that is not the best RPG ever made but its a whole new game, that a new AC. Japanese games industry is very dynamic in genres and gameplay while the West is like  "Look our awesome graphics... and if you buy now you get exclusive DLC".

Hey. If   "This is what innovation looks like. Deal with it."  is true, then I don't want innovation..

Awesome article. I completely behind this thoughts, Japanese gaming don't need to pretend to be western, like this doing Capcom. 

If you ask me personally, both sides are on the downward spiral.  Though I feel that Japanese developers have a better chance of rebounding compared to Western developers who are focused on inane crap that ends up hurting games more than making them better.

While I think some of your points were a little too hyperbolic (e.g. Ground Zeroes breaking limits of graphical power), I generally agree with what you said. I've been gaming since the mid-'80s when Japan effectively took over the industry. For about 20 years straight Japan was where video games came from for the most part to most people. To me, Japan was the Mecca of video games when I was growing up and is why I even started importing games to begin with. It sucks when I hear discussion about how crappy Japan is at making good games because I don't see that as the case. What has really happened, from my point of view, is that the west has finally come up to their level within the past decade. If anything is hurting game making in Japan, it's probably that console development for "AAA" games has skyrocketed in cost in this current generation and a lot of the Japanese studios don't want to risk that kind of money.

I want to see more Japanese games on PC. Hopefully Dark Souls shows Japanese devs the viability of the platform.

no Binary Domain? :P

Great post, though. I agree 100% !

Japan's not behind anyone this generation, it's problem is that the gaming economy at large has over-inflated itself to the point where no one wants to be taking risks. Capcom and Bamco suffer this trope the most in their titles, with the exception of a few gems in Lost Planet and Tales of Vesperia respectively, but at the same time western studios like Activision and especially EA feel very much behind the times. They all use the same tactics to gain sales: Running off a game/team name, expensive day-one DLC, incomplete/imperfect releases, major mistreatment of sub-divisions/contract studios. Their practices should never be of envy. However I believe Keji Infaune was wrong to say the Japanese game industry was dead when From Software, Platinum Games and Tri-Ace still seemingly present whacky and original releases each year. Western influence or otherwise, Japan still makes great damn games. No more can really be said than that, you have to deal with the bad before you hit the good.

You say yourself that stuff like assassins creed tool risks to get started, but don't now. Same thing with final fantasy... Regardless of quality it's guaranteed to sell millions on name alone, so making the same game structure with different combat isn't really risk taking.. There are a lot of Japanese devs that fit you point, but final fantasy is not one of them, it's the poster child for Japanese stagnation theories.

Know what has been the biggest reason, people seemed to have turned in on Japan over the past generation?

Their adherence to stick to anything that isn't "realistic". Admit it. Following 2001's Western revolution involving GTA III and Halo CE, the realism has permeated more than ever in gaming. With the dawn of this gen, it was the "realistic" graphics which were promoted more than anything. Immersion was equated with games having believable worlds, realistic graphics. Something which many developers of Japan have refused to adhere to. 

While in West, "realistic" games like Heavy Rain were praised, more meaningful games like Lost Odyssey were given a miss simply because they appeared too dripping with cliches. In the world, where an average gamer had little time to research about games, and almost all his info came from "Spike TV", "IGN", "Metacritic" and/or "VGA/E3", ignorance spread quickly.

It isn't that Japanese games have lost respect compared to earlier generations. It's just that their appeal now seems small with the inflow of the "new breed" of gamers who are slaves to the yearly sequels and holiday blockbuster models that EA/Activision have monopolized.

I think there has been no dearth in innovation from Japan, either this gen or ever. You mentioned many great examples and every game has a dedicated fanbase. Just that such fanbase, which seemed relevant before Xbox 360/PS3/Wii flooded almost every living room in the neighbourhood, now cease to seem relevant anymore, when it comes to numbers.

Great blog as usual. Should have MOAR mention about Atlus but oh well. :D