If you read the reasons that Inafune left Capcom, you can see exactly what is ruining them as a company. All Japanese developers have this strange sense of tradition in their games, and Capcom is particularly hesitant to innovate. Once they create an IP, every sequel is almost identical to the predecessors. This isn't always bad, but using Megaman as an example, you can see how insanely far they go with this: Megaman Battle Network was a sort-of-interesting take on the MM universe, but Capcom completely killed the series for me. Instead of taking their time and crafting quality sequels, they just churned out one after another. Soon after, they decided to take the Pokemon route of releasing two versions of the same game. Then, dissatisfied with that, they chose to release 3(!) versions of the same game. To me, every single Battle Network game is interchangeable.
This is the same thing that happened to Guitar Hero, Splinter Cell, and is happening to Call of Duty right now. Releasing a series iteration every year may make fiscal sense in the short run, but in the greater scheme of things, it kills the very same franchises that were so beloved in the first place. We may bitch and moan when a favored developer takes a long time to release a game, but the end results are usually amazing. Think of Valve-time. Think of Ken Levine and Irrational Games. We hear about their current projects over a year before they're released, and this is still usually at least a year after they've started working on said games. Still, I would much rather wait longer for a quality game.
Not that Capcom doesn't know how to innovate. Resident Evil does tend to try different things on a regular basis. 4, for example, was a huge departure, and it is my favorite in the series. They just don't do it very often. In competing with a steadily growing western-developer base, Japan needs to rethink their ideas on tradition if they want western gamers to continue buying their games.
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