Will Japanese gaming die in America?

Die? No. Become niche in many regards? Possibly.

When the market exploded in North America it incorporated whole new cultures, and those cultures are now the dominant ones. As noted, ten to twenty years ago the top five sellers were generally the games I looked forward to. Now? The top five are often meh to me, when Black Ops 2, Halo 4 and Just Dance 4 are the "big holiday releases" and none of those register an iota of excitement in me, shows to me how the premier titles have shifted.

I hope for my personal tastes that we can keep getting Japanese influence in our games, but acknowledge it is no longer the driving force it was in NA's majority gaming culture.

Im probably just being naive but as long as the otaku or anime culture stays alive in America then neither will die here.

The big thing about those cultures is per person they likely spend more money on a property (hence why CE are so popular among those type of games).

The question is can mainly small to medium Japanese developers accept the "new normal" in terms of sales and return on investment? What is the number, if there is one, they need to make localization worth their while?

There are many problems going on today to keep Japanese games from taking over the market again. The main one is on the West (obviously), but a it only survives because Japan itself allows it to continue, and grow bigger, I'll explain:
For this generation of gamers, Graphics=Quality. Ask any kid or teen today what would they like to play: The bad and generic FPS with pretty graphs that dominates the market, or the RPG that focus on history and gameplay and doesn't care too much about graphics. You all know what the answer would be.

And let's take a look at Japan for a moment: an enormous wave of Moe anime and manga flooded the market, and since games and anime appeal more or less for the same audience, the games end up going that same way "moeing" their games. Since there is an obvious incompatibility between Moe aesthetics and realistic graphics, this just makes the games LESS appealing to the western audience, and this gave birth to a vicious cycle that companies can't break free: Their space in the west got small, which made them less inclined to take risks and make something new, so they just limit themselves to make niche games because there will always be some Otaku basement-dweller to buy them.

Also linked to this problem, and what is most infuriating, is that because of the "moeization", some guys that are messed up in the head start thinking Japanese games are not "mature" enough for them: "WHAT? you are playing a Japanese game that involves strategy and you actually have to THINK? This is a kiddie game, I'm gonna play my mindless button-mashing shooter, it will make me appear more cool"


I just hope the whole industry crashes like it did in the 80's, so we can finally see something new arising from the ashes and maybe start a new prosperous era for us all.

Just one thing....are you my long lost twin?