Western gamers' tastes changing. FPS games are big in the west, and not so much in Japan. Japanese game companies (with maybe the exception of Nintendo) pretty much focus solely on the Japanese demographic, and not the American one. It's just back in the day Japanese and American audiences had more similar tastes (platformers, RPGs, etc.)
Not only that, back then the only consoles (minus unpopular attempts by Atari) were Japanese consoles. Nowadays we have the Xbox 360.