What happened? Did Japan suddenly lose all previous interest in video game consoles?
It's bit complicated to answer. As always, many things happened. Surely I'm leaving things behind, Japan developers were less prone to collaborating between them not to mention sharing engines, tools, techniques... Usually they patented.
The West, since Net Yaroze days has been always more indie in this aspect.
So eventually the West reached Japan level.
The .dot bubble burst also damaged globally but in special Asia. I don't remember if Nokia was victim partially of that, but what I mean is that releasing hardware became a more risky adventure. Many big and cherished studios (real quality guarantee seals) closed doors due bankuptcy, dissapearing like Psygnosis or Probe/Acclaim and being bought and kept the name like SNK by Playmore.
Internet, time, audiences taste shifting and consequent gaming platforms changed the market basis or arcade saloons, where the next hardware was teased and we got home versions.
Ah, the online gaming ate consoles once. The early days of Counter Strike was massive obsession at leatst where I live. And Diablo 2.
@Bob's Pizzeria I dont have an answer to this question but it Saturn copies would be super expensive now like Panzer Dragoon saga. My DC copy of Shenmue i bought in Japan is not worth alot.
More than that, if for example you or me find by chance a copy of Shenmue Saturn, that moment on our lives are inmediatly in danger. Trust no one should be applied in that case. Contact this site using Tails OS for example.