Once upon a time, Japanese games were vastly superior to American ones. Now, they're not. Japanese publishers are starting to realise that they are competing on a global scale with Western developers. And if recent Halo 3 sales in Japan are any indication, Japanese consumers are slowly starting to realise this as well. Acording to Koei's managing executive officer and software division deputy general manager Takazumi Tomoike:
Actually, even within Koei, we are not always able to share technical information within the company itself. And it is true that we are not as good in Japan as the U.S. at sharing information and technology, to use the latest and greatest. The United States is better at doing that I believe, and I think this is reflected in the titles, the hit titles that you see worldwide. You used to see a whole bunch of Japanese titles and products and now there are only a few that you can count very easily. So I think you're right, Japan may be falling slightly behind in that sense.
Left hand meet right hand.
Koei Interview [Gamasutra]