This might only be slightly more controversial
I doubt that's controversial at all. At least not on the culture of NeoGAF.
As for how it effects its popularity. I don't know, or care all that much. As much as I like video games, I like moe even more. So I wouldn't be willing to lose moe for success of video games I love. I also don't think that greater popularity is necessarily a good thing. A lot of my favourite music will probably not ever be mainstream and have mainstream appeal. But that's okay.
Also, something like moe isn't defined by the extremes and stereotypes of some of its fans. Neither is any media. And using moe did not prevent Recettear for selling over 300,000 copies. Which may not be as much as many other games, but is enough of a success to justify creating more of such types of games. Especially if the creator is passionate for that sort of thing. Which many creators in the Japanese indie gaming scene, are passionate for moe. Some are even willing to make their moe games for free because they care about them.
I don't actually think that moe has as much of an effect on sales as many people think. I think that moe is a factor for some people, either for or against. But the popularity of some things is dependent on far more than things like that. DoDonPachi has achieved limited success outside of how much moe it uses or doesn't use. The recent use of moe in Cave's games does not appear to have negatively affected them financially in any way. In fact, the moe of Sai Dai Ou Jou has probably positively influenced the sales of a niche game in a niche genre. The use of moe is pretty independent of the game's sales. And what actually limits the sales of the game, is belonging to to the SHMUP or Scrolling Shooter genre.
Moe, most likely, broadened the appeal of the DoDonPachi games and helped bring in a new audience to give Cave revenue. Though it's possible that the use of moe in Dai Ou Jou was a personal artistic choice. Cave seems to like exploring tragic relationships between humans and robots. Dai Ou Jou is the first game in which Cave experimented with moe in DoDonPachi, and was many years ago.
This same comparison could be made of music. Where, in the Japanese electronic music scene, moe is prominent. I suppose that some could argue that the use of moe from artists like kors k or DJ Sharpnel is negatively affecting the popularity of Japanese hardcore techno music. But I feel the the use of moe is independent of the success of the music, if not a positive influence on its popularity. Many people have discovered hardcore techno simply because of the moe. And Japanese hardcore techno, is some of the most popular hardcore techno in the world. And the Japanese industry has an especially important place in the Happy Hardcore genre. The reason this genre or music scene isn't mainstream, isn't because of the heavy use of moe that many electronic artists in Japan use. It's because the core of that style of music isn't popular.
Sometimes the basic essence of what makes a kind of video game what it is, or a type of music what it is, just isn't popular. Moe, also, on the other hand, is a rising phenomenon and a niche that isn't going away.
And again, as much as I like video games and want them to be successful. I want moe to be successful even more. Just as I don't mind music I enjoy becoming mainstream. Similarly, I care about moe, whether it becomes mainstream or not. I cheer on the success of moe, but if it should remain obscure, that's fine too, I suppose. Again, however, I'm not going to give that up for the mainstream appeal of a video game. And I'm going to continue to fund and support moe.
And I don't see how it is better to appeal to mainstream tastes than to niche tastes. It's possible, for a company, that would lead to more sales if they changed their aesthetic to look more Western. But that market is also very difficult, too. Only so many games can be mainstream successes. And that kind of risk taking is exactly what companies like Capcom are doing right now.
I think that companies like Nippon Ichi, who are using moe, right now, are in a more secure position than companies like Capcom, who are gambling on broad appeal.