I remember when the generation was starting, I assumed history would repeat itself, after all we were getting a new Sony, Microsoft and Nintendo console, so it seemed fair to assume that it would be a repeat of the last generation, with Sony unequivocally on the top, Microsoft following close behind and Nintendo firmly within the niche it found itself in the Gamecube, however I couldn't have been more wrong on that front.
Another thing that I assumed was a given and turned out to be tragically wrong about was I assumed Japan would always be an important place in the video game world, wrong again, so tragically, tragically wrong.
let me put it to you this way, the last Japanese developed game that felt Japanese that I played start to finish was Persona 3 over five years ago and that wasn't even technically part of the 7th gen, that was a PS2 game! Japan used to be the place you would go if you wanted games with actual thought provoking stories and characters that you actually cared about (Silent Hill 2, Metal Gear Solid), Western games (with plenty of notable exceptions of course) was primarily where you went to see Space Marines blowin' shit up, football games and terrible "Gangsta" themed games, during the 7th generation Western games got smarter (Call of Duty aside), with games like Bioshock and The Last of Us, which is great! I love that fact! I just wish Japan could have continued to thrive.
Yes, Japanese developed games still exist, but here's the problem, pound for pound they're vastly outnumbered now by the amount of western developed games and on top of that, many of the ones that do come out try to court Western gamers by hiding the fact that they're Japanese, like the Gears of War ripoff Quantum Theory, a game that neither I, nor I'm willing to bet anyone else, has actually played, even already established franchises like Resident Evil have intentionally been trying like hell to "Westernize" themselves, watering down the formulas that made them popular in the first place and replacing them with stale "me too" tropes.
Even rarer are Japanese games that actually and look and feel like Japanese games, why do you think people flipped out over Deadly Premonition so much? because quirky Japanese games like that have become all but extinct, if Deadly Premonition had come out circa 2004/2005 or so it would have barely been a blip on anyone's radar, games like that used to be a dime a dozen, don't believe me? well have you ever played or even heard of Deadly Premonition's developer's previous game, Spy Fiction? I thought so
Point is, Japan, outside of Nintendo and Hideo Kojima, has become irrelevant, no one but the "weeaboos" care anymore, you used to get even "dudebro" gamers excited about the latest Final Fantasy for example, now no one gives a shit, including many former Final Fantasy fans themselves, I've given a lot of thought as to why this happened and I have a million different theories, but I think it all boils down to two simple things, 1. games got a lot more expensive to develop and 2. Western gamers, who have always been just as important to Japanese devlopers as Japanese gamers themselves, stopped caring, for lack of a better word Japan used to be "hip" in the first half of the 2000's, but there was a sea change in the culture and now it's considered more of an embarrassment than anything to admit you like anime, Japan etc, it's just not where our culture is at anymore, there's no place for Japan at the table anymore in the world of Call of Duty, Gears of War and Halo themed Mountain Dew
Now is there hope for Japan's gaming future? I'm too cynical to believe things will ever go back to the way they were before, things are too far gone, but the lesson the 7th generation taught me was you can't predict how video games will change, so I suppose there is hope for some kind of a comeback for Japanese games, I hope so anyway.
So for me, that's what defines the 7th generation of video games, it was the era in which the West gained total dominance and Japan, once a crucial part of video games, was banished to the land of wind and ghosts.