The problem is that Japan has essentially "lost" this generation of game development. Keiji Inafune said as much, and I'd believe it. Japanese developers took this route that gaming would always be some fantastic thing they could never fail at, something they could almost coast along with. Then, out of nowhere, shooters became huge outside of PC gaming, and the market shifted towards it. People still loved all that Japanese-made stuff, like RPGs and action games, but while the game industry boomed, they weren't seeing as much of that profit.
Sure they tried their hand at making shooters, and some of them were okay, but in the end, it wasn't something they could pull off, and they refused to really "learn" about it. Instead, they choose some half-assed, cheap developers to make occidental games for them, and then get angry when they don't sell. DmC is one of the first of these that I've seen that really goes about it differently. It's like Capcom learned their lesson or something, that they needed to be much more hands-on with the game's development, and it shows.
Unfortunately, Japan seeing so much more profit from shooters made them think we don't want their stuff, like so many RPGs and other great titles that we never got. Namco Bandai was notorious for this, having not released any Tales of games for the longest time because they thought "All Westerners care about is shooters and sports games," ignoring the fact that their fanbases cried for more, and only spent their money elsewhere because they didn't give them a reason to give it to them. They seem to be wising up, but...god...Japan has way too much hubris at times, and it's screwing over part of their consumer base :/