Last generation, when I heard "RPG," it was synonymous with games like Final Fantasy. Ever since Final Fantasy VII, Japan pretty much ruled the RPG scene, but in the current generation, JRPGs seem to have been going into somewhat of a decline. Take a look at the scores that the heavy-hitter JRPGs on current-gen systems have gotten:
Blue Dragon - 6.0
Lost Odyssey - 7.5
Eternal Sonata - 8.5
Tales of Vesperia - 8.5
The Last Remnant - 6.5
Infinite Undiscovery - 6.5
Out of all of them, only 2 have broken the AA barrier. All of Square's games have been strictly B-grade in the 6.0 range. In fact, the highest scoring JRPG in the last few years was Persona 4, which got a 9.0, and that is a PS2 game! Japan's RPG kings have really dropped the ball this gen IMO. When you look at the RPGs that are actually recieving acclaim these days, they're all from American developers. Fallout 3 and Oblivion both managed to pick up game of the year awards, and Mass Effect, while AA game at Gamespot still did recieve a good amount of praise, and is considered to be one of the better RPG's of this generation. I loved both Oblivion and Fallout 3, and I hope to try Mass Effect at some point in the future, so for all intents and purposes, the WRPG developers have "stolen" me away from the JRPG market-- or more likely, the JRPG market handed me over.
So what happened that's causing JRPGs to dwindle this generation? Are the developers simply having trouble adapting to the new hardware, or is their creativity simply drying up? Whatever the case is, the Japanese RPG scene doesn't look very good this generation, and I really don't see any JRPGs on the horizon that I'm particularly excited about right now.