A Fork said:
In the west? In my mind, the VN market came from first hardcore otaku, then people who hang around on /a/, then people who wanted to play the source material of their favorite anime, then Katawa Shoujo, and finally Steam Greenlight made it a gag gift.
I'm primarily talking from a business and mainstream perspective, the otaku and places like /a/ and other anime boards were certainly a contributing factor in driving sales and enthusiasm for these properties, perhaps even the main factor, but from the perspective of businesses, they are looking to attract more numbers than what places like /a/ can provide. Western otaku are the foundation, much like Japan, but much like what they did to Fate Stay and Muv-Luv in Japan, the ecchi otaku are a specialty market at best, a place to start, but any businessman in charge of a company of any notable size isn't going to want to just appeal to that market.
Can visual novels ever hope to appeal to a broad audience? I mean we are talking about a medium that will always have the stigma of eroge. Lots of people can't discern the two. The good VNs have more words than entire book series, and is mainly 50+ hours of reading, reading, reading, and if the game has routes than be prepared to read the same thing over and over. For VNs, lots of times it becomes a boring slog, but at the end I think, wow that was amazing, totally worth the suffering.
This is a good question, and one that online digital distribution has now finally made it economically feasible to explore for a lot of Japanese businesses. The risk has been lessened as they no longer stand to lose significantly if their forays fail.
As for stigma, it will likely be a thing for the foreseeable future, even in Japan, PC gaming tends to be seen as the realm of porn games that get toned down for Japanese console release. In the West, it also has to contend with the, admittedly lessening, but still present view in the mainstream that video games are an inherently juvenile endeavor, as well as the animation age ghetto that sees cartoons as mostly for children, a double whammy of cultural stigmas. One that is being eroded, but will likely be around for years to come until those that grew up with anime in the 80's and 90's and the more adult Western cartoons of the 90's onwards start to pass their views on to their children.
To say that the all-ages console version pushed the popularity of Muv Luv is kind of a funky claim. Yes, it's true, but that's not the entire story. Console ports sell more than their PC counterpart, because well, there are millions of consoles and not so many PCs. Looking at sales, computer gaming at that point, was practically eroge. So, did they appeal to a wider audience? Yes, but not in the way you describe it, as "less ecchi". The sex scenes were removed so they could actually publish the game on consoles, but the ecchi is still there.
Ecchi is still there, but the general cultural attitude is that straight up sex games are less accepted on consoles, admittedly, even Japan kind of has the view that consoles are generally the "all-ages" device. Muv-Luv is hardly the only example, generally "all-ages" edits sell better than the full porn counter-parts, even across PC, while VN's have a stigma, there are crowds of adults and women that flock to those exceptional VN's that are much more than their sparse sex scenes. Much like the Nasuverse, some Japanese businesses seem to see it as, you add some porn to get the guaranteed otaku crowd, and then if the story and reviews are positive, you drop the sex and the lewder fanservice and just tell the story.
Of course, the "porn with plot" VN's that are also common are an exception to this, creating an all-ages version of those types of stories would be like trying to sell pornographic movies with the sex edited out, an overall pointless endeavor.
From a business perspective, it makes sense to create an all ages version so that people under 18 could buy it. Hell, Some people buy the console version just for their collection.
Under 18, girls and women into the better told slice of life stories, adults that would have been otherwise uncomfortable with the high/middle schoolers having explicit sex (yes a large number of Japanese people I know think explicitly sexual moe stuff is disturbing too), even over 18s that just thought the sex was holding an interesting story or world building back. The last being the reason my Japanese Cousin-in-law eventually got into Muv-Luv, and introduced it to me, although I'll admit I had no idea they were trying to kickstart a translation, which is nice, fan translations have existed forever, but I hope it still does well here.
Muv Luv was already a hit, and Alternative gained an Episode 3 status. Then Alternative became the highest rated VN since then. To say that the all ages PS3 version pushed the popularity of the series would be like saying that Steam popularized the Half Life series.
Muv-Luv was a hit for what it was, it doesn't really change the fact that its all-ages edit brought in a broader audience, while the reason for the edit wasn't just to broaden the audience, it is a tactic that has been used even for Japanese PC to PC ports and translating VN's and light novel's into anime, manga, or movie format. At least that's how its been described to me by Japanese relatives: a known practice of using sex to appeal to the otaku, usually looked at with disdain, and then being broadened or relaunched with a similar premise for more mainstream audiences with the explicit stuff taken out.
EDIT: regardless of the reasons, whether my assessment is true or offbase, I do want to see the current streak of digitizing more offbeat genres and stories from Japan continue and succeed. I would prefer we not get strange edits like the 90's because a property is seen as "too Japanese".