Returning from TGS last year, those of us in attendance couldn’t help but feel slightly deflated. The show had lost some of its luster thanks to luke-warm offerings by Japanese publishers. Capcom’s mega-man – Keiji Inafune – made a notable statement on the issue, declaring the Japanese gaming market dead on arrival due to failures by his peers.

“When I look around at all the different games on the TGS event floor, I said ‘Man, Japan is over. We’re done; our game industry is finished,” Inafune candidly offered at a Dead Rising 2 event last year. Has his opinion changed in the twelve months since?

Following up just prior to the 2010 Tokyo Game Show, spoke to Inafune again. His thoughts? “I said that comment hoping that the Japanese creators were going to wake up. However, there has been no change whatsoever to the situation since last year, so I’m still very pessimistic.”

“I feel that many people in the industry are still living the glory of the 80s and 90s, so they don’t admit that there is a problem to start with,” he continued. “But there is. Just look at the domestic market, which has shrunk. Therefore it’s really important that we realize that we’re behind the western market now, get humble and start learning what’s going on. Otherwise the Japanese market is going to disappear completely.”

Will Japanese publishers step up their game at TGS this year? Well get back to you.