I feel inclined to point out that, the current situation is Japan is more or less acceptable. There's still enough of a market there to support console games coming out, but console games with an actual budget need to appeal to markets outside of Japan in order to justify the expense. Honestly, Japanese publishers should've been making a greater effort to fully crack western tastes long before now. Even during the hay-day of Japanese console gaming, the general idea was that games were designed with Japanese tastes in mind first, and if they happened to appeal to the west it was a big bonus. I believe this mind-set played a part in the decline in interest western audiences had for Japanese games starting around the middle of the last decade. Japanese publishers kept going primarily after Japanese audiences they thought would buy their games, which natively meant otaku for lack of better term. (No really, if you have a better term please let me know.) This in turn alienated a portion of the western audience, which resulted in Japanese games being considered somewhat of a niche in western audiences.
The PS4 has eased this situation somewhat, by simple virtue of the fact that Japanese publishers don't need to port games from one platform to another just to have a shot at reaching the bulk of the western audience. This makes localization a bit less expensive, and as such gives Japanese publishers some additional incentive to try to appeal to western audiences somewhat.
Or perhaps I'm just overthinking things somewhat.
Either way though, the current situation is acceptable, but not ideal. The ideal situation would be, that the Japanese audience alone could justify games with a AAA budget. While this may prevent some publishers from trying to crack the western audience, I do feel that there are some worthwhile game experiences we will probably never get from a Japanese game trying to reach western audiences. Perhaps one day that market will once again be able to support both types of game, but the situation is still never the less acceptable for now.
