Japan really dropped the ball with consoles past gen and contributed gravely to this situation (sure, switch to portable was a reality, but they basically pushed the industry there with their abysmal show in consoles in the first years of the gen, then they improved but still too little, too late.).
BUT, I still think there is an appeal and a chance if they manage to not commit huge failures this time and get some momentum with heavy hitters.
Bloodborne is a clear case of game that would still be made and would be successful, because it would get picked by a good number of publishers outside of Sony if the chance was there. From Software is a clear case of international success and a example of what Japan has to offer in the console space.
I truly believe that there is a good chance this 2015-2016 to see a reinvigorated Japanese console scene. There are great names coming and they are looking good. And there are also a good bunch of companies that won't abandon the console space anytime soon (Sega, Atlus, Falcom, Compile, NIS, Ark, etc).
So yes, call me optimistic, but I believe good things are coming. Japanese videogames industry just need some international good hits and the perception will change.