The world of videogames has lost a lot of the boundaries that it was plagued by until fairly recent times. Nowadays, most if not all of the major games made in Japan, the US and Europe are localized into all major languages, and because videogames are now big business on an international level, most localizations are delivered within a relatively short period (several months) after the release of the original work, and lots of games are even released in all major regions at the same time (give or take a week or two).
And even in case a game does not get translated into any of the other regions, which might happen for minor and more low-budget games, the fact that most of the current consoles are region-free means that avid fans will be able to play pretty much anything they can import, without any trouble.
But it wasn't always like this. Even games that are now major international bestsellers used to be minor at some point, and as such, might not have seen an international release. Probably one of the most renowned series in this regard is Square Enix's flagship RPG series Final Fantasy. The 13th installment in the main series is on the verge of being finished, but in Europe only half of those were initially released.
Many games that were originally considered to be ill-fitted for a Western audience are now multi-million dollar franchises across the globe; not only Final Fantasy, but Dance Dance Revolution and Dragon Quest amongst many others have proven themselves to be very popular outside of Japan, despite initial doubt as to their success.
RPGs especially, focusing more on strategy and turn-based gameplay than on reflexes and direct action were not considered to be appropriate fodder for a Western audience, which was expected to be looking for more immediate gratification. Halfway through the 90s some of the major Japanese RPGs for the Super Nintendo (and later on for the PlayStation) would start making their way over to American shores but, with the exception of the Final Fantasy series, hardly any of them were judged appropriate for Europe.
Of course there was also the problem that, in order to localize RPGs to Europe, the vast amounts of text would have to be translated into several languages at once which came down to a rather sizeable financial gamble that few developers were willing to take.
Nowadays, this is not much of a problem. Japanese RPGs have become very popular in the West, and localizing them can hardly be called a risk anymore. Even the more obscure and hardcore RPG has found its niche outside of Japan, showing how Western taste has become broader over the years.
That said, there are still several genres that have failed to find their way Westward. Gambling games like Horse Racing and Pachinko/Slot Machine simulators, Visual Novels, and Love Sims/Dating Games are all fairly big genres in Japan yet few if any have made it anywhere outside of Japan. The latter two are perhaps not deemed suitable for the Western market, for being very text heavy and featuring mostly still images, and no real action to speak of. This is kind of a shame, because from a translational point of view it would offer quite a nice challenge.
On the other hand, perhaps slightly more worrisome, we see that even major American releases don't sell all that well in Japan. Hugely popular series like Grand Theft Auto and God of War have sold millions in the West, but have done no more than decent in Japan. This is an interesting fact that tends to create heated debate on gaming forums.
And it is here that one of the greatest challenges of video game localization lies. If Western games don't do that well in Japan, can it be blamed on the localization? Does the humor employed in many action/adventure games not catch on in Japan? Is the famous 'one-liner' uttered by your average Action Movie/Game Hero something that does not work well in a Japanese environment? What about the language of street thugs and mafia members in GTA?
Surely it can be said that, if the humor doesn't come across, or the believability is lost in the target product, the translation is, at least partially, to blame? In order for Western games to do better in Japan, and perhaps to bring (even more) obscure Japanese games to Western shores, clever and creative translation is the key.