This week is GDC, the Game Developers Conference, where industry members gather and discuss the business and processes of creating games.
There are always a lot of great stories that come out of GDC, new product reveals, great interviews and excellent panels, but there is one particular story that has stood out and has personally affected me. This week, following a panel on Indie Game: The Movie (which I can't wait to see), Phil Fish, the creator of the soon-to-be released Fez (my most anticipated game of this year!) replied to a question from an attendee (Japanese game developer Makoto Goto) who asked about what he thought of modern Japanese games by saying "Your games just suck". He then continued to criticize Japanese games (I have not been able to find any source that mentions exactly what the criticisms were).
First of all, I would like to say that I believe that everyone is entitled to their opinion, regardless of how it conflicts with my own. I don't have any problem with his comments (as wrong as they may be), but I do feel that this has poured gasoline onto the fiery discussion that is "Japanese vs. Western developers". And for that reason, I would like to inform the uninformed (and there are many uninformed people out there, based on what I've been reading on the internet in the past 24 hours).
This whole anti-Japanese game sentiment has been prevalent for over a year now, and I don't know how it started (Keiji Inafune made comments about the "dire" state of the Japanese development community a couple of years ago, this may have started this sentiment). I believe that taking an anti-anything stance is usually incorrect (I'm of course not counting fighting injustice or criminal behavior, of course), if your platform is "all ____ are ____" then you are embarrassingly showing your ignorance. I also haven't heard many (or any) compelling arguments that support this theory, either. So, I'm going to present some factual data, and present a case that illustrates what I see are the strengths and failings of Japanese developed games when compared directly to Western developed games.
One comparison that most effectively and evidently illustrates the difference between Japanese and Western games is Super Street Fighter IV vs. Mortal Kombat.

An epic fanboy battle that's been going on for 20 years
Mortal Kombat and Street Fighter have been battling for fighting game supremacy for a long time, and both have loyal fans. Street Fighter games, developed in Japan and Mortal Kombat, developed in the USA are both great examples of where these developers put their focus and what their goals are when developing a title.
Now, trying to be as objective as possible, I will start off by saying that, as a developer myself, I believe that the gameplay systems and core mechanics are much more sound and well implemented in Street Fighter. I would even go as far as saying that it is a more skillfully crafted game. The controls, animations and gameplay AI are more evidently refined in SSFIV.
As for Mortal Kombat, it is a well made game as well, just not as "well made" as SSFIV. Where MK surpasses SSFIV is in its content. There is much more variety and depth to Mortal Kombat's content, from gameplay modes, to additional features and gameplay modifiers. There are so many different ways to play and experience Mortal Kombat. There's a mission mode (with 300 missions to complete), a lengthy and interesting story mode, and many additions that affect how matches are played out (like the option to play with characters that have no arms!).
And therein lies the big difference. It's my observation that in the present-day, Western developers create better products and Japanese developers create better games. Typically, that is the most common complaint I have with Japanese developed games; a lack of additional content.
Japanese developers seem to struggle with understanding how to create that elusive "complete package". Whether its absent or broken online features or a strictness that only allows the player to play the game a certain way (lack of player freedom).
A great example of this lack of understanding is Nintendo's online presence. The Wii's online capabilities are laughable and I don't think Nintendo has any idea how to create, foster and support an online community infrastructure like PSN or Xbox LIVE. And I have my doubts that the WiiU will fix that.
I've been saying for years now: "Could you imagine being able to play Super Smash Bros. Brawl easily and trouble-free online?" I think I would literally never play another game. Luckily, I'm convinced that will never happen.
A common argument is that Japanese developers are "stuck in the past", and I happen to think that's not such a bad thing. I prefer to think of it as "Japanese developers have not forgotten that they make GAMES." Let's take a look at another example.

Third-person shooters, head-to-head
I going to go out on a limb and assume that you didn't play Vanquish (and if you haven't played it, you should look into remedying that ASAP - doctor's orders!). Last year, I loaned that game out to almost everyone at my studio and the most common reaction was "that was one of, if not the best third-person shooter I've ever played." The game plays well and is a joy to play (you know, like how games are supposed to be fun?) The dialogue is hokey (at best) and the story is somewhat of a convoluted mess... but it plays like a dream!
Then we have Gears of War 3, the third part of the Epic (both in scale and developed by) Gears of War series. GoW3 doesn't play as fluidly or as smoothly as Vanquish, and it's not as fun. It's still an excellent game, but its gameplay (I'm a slave to gameplay) just isn't as good as Vanquish's. What GoW3 does provide however, is a more complete experience. Beyond the single player campaign (which you can play with up to 4 people cooperatively) there is an awe-inspiring amount of content. There are multiple variations of both competitive and cooperative multiplayer modes and the story telling is straight forward, allowing you to become more invested in the characters and the world.
This comparison bares more than some resemblance to the fighting game comparison above. I think you are no doubt seeing a pattern here. And this pattern is quite common.
When people say that Japanese developers are "out of touch" and "behind the times", at most you can say that they are talking about the ways in which they are presenting and packaging their content. It's quite foolish (and downright wrong) to say that it is the content itself (the game at its core) where the Japanese are lacking.
Someone recently asked openly on twitter "Are there any major game developers that specialize in creating new IPs? Excluding indie developers." and I replied by mentioning Platinum Games (the developer of Vanquish, Bayonetta and Mad World). Someone else replied with Grasshopper Manufacture (No More Heroes, Killer7, Shadows of the Damned). He later responded that those were the only two valid answers he'd received. If you actually take a look, it's the Japanese developers who actually take risks and create exciting new ideas. Of course, this does not always work out commercially (have you played any of those games mentioned in this paragraph?).
In fact, if anything, I'd say that indie developers have the most in common with Japanese developers. The way you see risks, original ideas and unique spins on classics... that's so Japanese!
Japanese developers need only learn how to build more complete packages and build communities. When it comes to the games themselves, clearly, they do that just fine.
Now that this craziness is behind us, I can go back to waiting (not so) patiently for Fez to be released!