Great interview with an expert on the localization and marketing of Western games in Japan. Very interesting insights about the importance of localization, of having into account the differences in culture and demographics, and of understanding the local consumer. Below, part of the interview dedicated to localization.
Tetsu Takahashi, currently in charge of Bethesda sister company Zenimax Asia, has worked at many of them as a Western to Japanese localization boss - most recently Fallout 3.
Q: What kind of localization trouble have you experienced? And how much work can you really justify on it before it becomes two expensive for return.
A: Localization isn't as expensive... It really depends on what your expectations are. If you're only planning to ship 10,000 units, you can't spend that much. I think that's... If you set your targets a little higher, at the end of the day, $100,000, $200,000 in localization costs is a small part of your costs.
I don't see that as costly as a risk. It's more of an investment to make sure that you hit that number (of shipped units). So, I guess to answer your question, it really depends on what your expectations are for the title. If the cost of your localization is enough to make or break your deal, then you probably shouldn't be doing it anyway.