has an interesting article on the decline of Japanese publishers. Their market share in the U.S. has dropped from 49% in 1998 to 29% today. Meanwhile, the Japanese video game market has shrunk from $3.4 billion to $2.2 billion over the same time period.
Although this isn't the main thrust of the article, I found this to be a somewhat interesting point from the article:
Which leads to another of the Japanese firms' woes: its game creators are allowed to act like prima donnas. Even though gaming has become an $18-billion-a-year global business, Japanese firms still pretend it's a cottage industry.
Suggested solutions from the article: make more games with hollywood licenses, develop games with more realistic art styles, and make games that are more "culturally relevant" to the North American market.
Short of opening studios here in the US and giving them a high degree of autonomy, I don't see how a Japanese publisher can get around the cultural barrier. Given how just completely goofy Japanese games based on American themes have been, I just can't imagine Namco or Konami make EA style games like Def Jam Vendetta. I'd love to see them try, though. The results would be hilarious.