Shinji Mikami, creator of Resident Evil, doesn't think that the JRPG is declining in popularity in the West - he thinks that it was never popular to begin with.
The Japanese game industry has been going through a little bit of a crisis of self-examination lately, and said crisis is perhaps perfectly exemplified in the state of the JRPG. Once upon a time, the Japanese RPG was ubiquitous, and during the era dominated by the PlayStation and PS2 seemed to be one of the more popular genres.
Recently, though, JRPGs have increasingly come under fire for being outdated. In December, BioWare co-founder Greg Zeschuk blamed the genre's fall from grace as a result of "a lack of evolution": "They kept delivering the same thing over and over. They make the dressing better, they look prettier, but it's still the same experience."
However, Resident Evil creator Shinji Mikami has a different outlook on the matter. Speaking with CVG, Mikami said that he believed that aside from a handful of exceptions, Japanese RPGs hadn't ever been big over in the West in the first place. "I think it is because Japanese RPGs were really never all that popular in the west to begin with," said Mikami. "I think the best way of interpreting things is that they aren't getting less popular; they weren't very popular from the start."
Even if we do have fond memories of games like Chrono Trigger and Xenogears, the guy might have a point. The West adores Final Fantasy, but that series does seem to be an exception rather than the rule: When was the last time you heard anybody in GameStop talking about the new Dragon Quest?