Just stumbled on this on a BBC technology blog :

Is the Japanese gaming industry in crisis?

Quote Originally Posted by BBC
In 2002, it is estimated that Japan accounted for nearly 50% of the world's gaming market. That has now fallen to around 10% and without Nintendo, with the success of the Wii console, the figure would be even lower - around 8%.
"The Japanese don't like shooting and war games very much. They prefer playing in fantasy worlds and battling with swords. I think there is very little interest in fighting with guns and this sort of combat game."
"It's only my guess but European and American game designers are probably more inspired by movies. In Japan, many creators are inspired by comics and animé. I think that's the big difference.
"There's another difference in graphics - European and Americans prefer realistic visuals whereas Japanese prefer more cartoon-like characters."