Capcom insists that Japanese games suck.

Essentially, that's what they're saying. Before the events that led to
Keji Inafune's departure; the company was quite vocal about how terrible
the Japanese gaming industry had become. “Personally when I looked around all the different games at the TGS floor, I said Man, Japan is over. We’re done. Our game industry is finished.”

These words were said by Inafune himself. There may be some truth behind those words, but if one looks at Capcom themselves...they have done very little to innovate the Japanese industry themselves. I would understand if they actually had a track record in innovation, but most of there titles follow the same formula in which the series had originally started with in the first place.

A good example would be Resident evil, Megaman, Street Fighter, Devil May cry, and a slew of other Capcom titles. Don't get me wrong; these are great titles, but they have done very little to innovate the games themselves. It makes you wonder if Capcom is in the right place to allow such absurd comments in the first place. I would even say that it has been severely damaging to the companies reputation itself.