Japan is historically and culturally insular, the only significant changes that occured in Japan where by an outside power forcing Japan to modernise or to change. The order of Japanese samurai's only collapsed when an American war ship sailed into Tokyo Harbour in the 1850's and and forced the Japanese to open up their ports to foregin trade. It was then when the Americans occupied Japan after WW2 and forced them to make their government a liberal democracy. Prior to 1850, Japan had been isolationist for... i think around 400-500 years.
This is why i think the Japanese have never been very outward looking, it's in their culture, and if you want to know why its in their culture you just need to look at their history. Fortunatly, we are not the losers of Japans insulararity, the Euro-American market is a strong one, and Japan not being part of that market does not leave Western game companies short of cash at all.
It would be nice if there was more two-way interaction going on between Japan and the West, the West, outward looking by nature, has always been happy to play Japanese games. It's sad that it's not the other way round, but there you go, it's the Japanese loss, and not ours.
, the word used to refer to titles made in the West as opposed to Japanese-made games, or geimu (ゲーム - yeah, it's just the word "game").
