Feelpus president Ray Nakazato -- developer of Lost Odyssey -- says that studios in western countries still lead in the markets because of their expansive knowledge of PC development.
He concedes that Japanese developers produce less technical high end projects and that western PC experience gives them an edge when switching to the consoles.
It's true that with the evolution of PCs over the years developers have had to up their game to stay strong. Suddenly switching to a console with set components takes a lot of the compatibility stress away and helps them focus on maximising an engines performance; Epic Game's Unreal Engine 3 is testament to that end.
"We need to look at the overseas market more seriously," Nakazato told Gamasutra. "I think one big factor is that in Western gaming market there is a long history of PC games. A long and big market with the PC games, so I think there are a lot of great developers and creators who kept making PC games."
A lot of the migration has been to do with rising development costs and the serious issue of piracy that stands almost unchallenged on the PC. With the move of traditional PC studios to the consoles it's understandable that Japanese projects will feel some of the heat.
"I think this generation of consoles, finally those people started showing up in the console game arena," adds Nakazato. "That's one big reason that Japan also seems to be a little behind in that arena."
RTS titles too are beginning to move more steadily to the consoles with C&C3, Supreme Commander and others looking to tap into the next-gen gamers.