Oh, gaming in Japan. Let's see here...
Advantages
1. Plenty of stores to find what you're looking for
2. Speaking of, you can actually find some retro gems, and I'm talking collector's items, in some used game shops for a ridiculously low price.
3. High-speed internet; Japan is the most wired country in the world. YAY!
4. Early release dates for domestic games compared to when the West gets them
5. New release prices are about the same as the US
6. Japanese exclusives; being able to play all those games I read about on blogs before coming here that have been only released in Japan. Jump Ultimate Stars FTW!
Disadvantages
First, I will get to the big one:
1. The otaku stigma. Believe it or not, gamers are not seen as "cool" in Japanese society, but looked down upon. I suppose if you're a member of this forum, that's not news to you, but this is a warning to the weeaboos and otaku out there who think that they would be welcomed with open arms by Japanese society. Hate to burst your bubble, but you will be cast out just as fiercely as you may be in the West. Otaku is a 4-letter word in Japanese (when referring to a person and not a house), and it doesn't just apply to anime nuts. It goes for nerds of all stripes over the age of 12. Once you're out of elementary school, if you want to be socially accepted, you study and play your club sport all your waking hours. If you're not doing one, you're doing the other. When you graduate, you work all your waking hours until you're 60. Then you might have time to play a game or two. And I am 100 percent serious on this. It sucks but it's true. That's the ideal life here, not a gamer lifestyle. So no, you won't be "big in Japan", you won't be seen as anything good in Japan.
2. Eroge. They're just as rare here as they are elsewhere, but the otaku gamers of the world gobble them up, and when the mainstream finds one, it gives Japanese gaming in particular a very bad image, as if these games weren't made in other places. See Rapelay and the shitstorm that went along with it for an example.
3. "Xbox 360? What's that? We thought only the Wii and PS3 came out this generation." Exaggerated, but the point is, good luck finding much for a Japanese XBox. In the gaming stores, you might find half a shelf of stuff compared to the 2 shelves or more of all the Sony and Nintendo systems, and half of that half-shelf will be stuff for the original Xbox and not the 360.
4. The NTSC-J region code. If you don't speak Japanese, there's about a 50-50 chance your game will come with English support if you get the Japanese version, usually dependent on where the developer is from. Western games will usually have English support, but Japanese games won't, though there have been examples of each going the other way on that. So if you don't speak Japanese, you may have to purchase an NTSC-J English copy from Play-Asia instead of just going to your local store. Adding to that, if it's a Wii, you are SOL. Wii games have NO English support whatsoever.
Sorry for the big rants on disadvantages, but I think the advantages are pretty self-explanatory compared to the disadvantages.