The problem with Japanese video games is that they take too damn long to make.
The gestation periods are absurd. Sure, Western games also require time to make, as do films, but some Japanese game studios take way too long. There's a reason for it, and it's not simply that Japanese studios are slower than their Western counterparts.
Many of the big Japanese developers toil away for several years on their games. Both "Gran Turismo 5" and "Final Fantasy XIII" took over five years to develop — excessive by Western standards. Sure, there are also American and European games that languish for years, but this lengthy development time is a malaise infecting so much of the Japanese game industry.