It seemed bad. Really bad.
I think with this gen, with Sony being the number one console...and maybe people are burnt out on FPS, that Japanese games are on the upswing.
And I'm purposefully leaving Nintendo out of this.
I'll point out a few things that make me feel this way.
Monster Hunter World - Great game. Sold like 10 million copies. Capcom's best selling game. Capcom was going down the drain, and that was a nice comeback (I'm kind of blown away by the sales of this).
Nier: Automata - Great game. Platinum couldn't sell shit before. Things looked bad for them. This is a very niche franchise. Sold over 3 million.
Persona 5 - Previously a niche title. Sold over 2 million.
Dark Souls III - Sold over 3 million.
Bloodborne - Sold close to 3 million (and an exclusive, at that).
Nioh - Sharp game (some may dispute). Great comeback for Team Ninja. Sold 2 million.
Evil Within - Mixed reception, but I thought it was good. Reliable sales numbers are hard to find on this one. Probably around 2 Million. Sequel did poorly, but it sucked (my opinion).
Metal Gear Solid V - Shipped 6 million copies by the end of 2016. Who knows where it's at now?
Last Guardian - Disappointing sales, but still sold more than any Team Ico game. Probably had a lot to do with the camera.
Ni no Kuni 2 - Most people (gamers, not critics) don't even like this game, and it sold over a million units.
Final Fantasy XV - Not going to discuss the quality of this game (I didn't even play it, as I don't like FF anymore), but sold over 7 million.
Street Fighter V - ....controversial. Disasterous launch. Pulled it together. Has around 2.5 million sold. Should have done better, but they fucked up. Still, not bad.
EDIT: Gonna add a couple more.
Resident Evil 7 - I didn't like it, but was well received. Did decently. They need to go back to third person.
Gravity Rush 2 - I don't think this sold that well, but I really enjoyed it. Just skip the worst side quests of all time.
So, I think that's pretty damn good. Not only that, there are games coming up that look good, and hopefully will sell too.
Shadows Die Twice
Ace Combat 7
Devil May Cry 5 (lots of hype, as it looks to be a return to form)
Dragon Quest XI (looks like it's going to do well, already)
Resident Evil 2 Remake
Valkyria Chronicles 4 (looks great. The PC sales of 1 did really well, so I hope that translates to this being a hit)
I think the quality, popularity, and sales of JP games are going up a lot. I'm particularly happy how Capcom seems to be getting it together.
How do you feel about it? Too bad shmups are dead, though.

EDIT: And let's not compare these to sales of GTA and FIFA. Those are blockbusters. I'm just interested in the quality being there, and JP games doing well enough to keep getting them (and not in budget form. Like the Activision Platinum games, or the day one release of SF V).