That is consistent with my thoughts on technology. The handhelds were still using tech that Japanese developers were familiar with and that made it simple to continue producing software just as they had been. They have continued to produce great handheld games as a result.
I appreciate your technological angle regarding Japan decline, however I think the collective inability to effectively evolve in business practices has really hurt Japanese publishers and developers.
Looking at this generation's trending business practices -- downloadable content, online connectivity (even in generally single-player games), and more casual-oriented games -- it's easy to see where Japan has faltered.
Even powerhouses like Nintendo initially balked at the idea of downloadable content. Just shy of a year ago, Reggie Philswhatever said, "We're unwilling to sell a piece of a game upfront, and, if you will, force a consumer to buy more later." (
Source) Yet, given the 3DS's initially disappointing sales, we've witnessed a major restructuring at Nintendo, and the introduction of an online infrastructure that is more accepting of patches and DLC.
Japanese developers have, for the most part, been unable to create compelling DLC. You have so many fighters (a primarily Eastern genre) shoehorning DLC into their games with locked out characters. JRPGs, which could easily incorporate mission packs as DLC ala Fallout 3 or GTAIV, have failed to generate interest.
So, yes, I agree that we'll see a resurgence of sorts by the Japanese market next cycle, but, in my mind, it has less to do with graphics and tech, and much more to do with marketing and convincing Western audiences that the game is worth getting. Games that have deftly incorporated connectivity alongside obvious value, such as Dark Souls, have done well at retail. So many of the games listed in response to Fish's comments are niche titles that failed to capture the gaming market as a whole, compared to the blockbusters (MGS series) or critical darlings (SotC) from last generation.
I think part of the anger or frustration comes from the fact that this guy hadn't proved shit up until this point. Who is he to claim that one of the super powers of the industry is complete garbage now? What have you done?
Ad hominem. Don't confuse the messenger with the message.
Outside observation sometimes leads to the most rational response, although obviously not in this case. Furthermore, Fish has been in the industry for a long time now.