Hi-Def is killing development houses.
Hi-Def games require lots of extra staff to handle the assets and artwork, among probably a ton of other unforeseen issues. It costs a lot of money to create a modern game title. Just look at all of the consolidation in the publishing and development houses.
What does this mean for West vs. East? I'll tell ya: ROI (Return on Investment)! When writing games are that expensive, you go where the biggest market resides. Which happens to be the U.S. and by virtue of association... Europe. Europe, especially the UK, is not super large on its own, but they seem to appreciate U.S. styled games plus I'm sure translation issues are a lot simpler. Expensive games get quick European ports and the Japanese press whines about development leaving for the west.
I'm sure it helps that Microsoft has the best game-programming tools, while Sony's is (once again) comparatively awful/confusing/incomplete. [Nintendo's Wii is apparently similar to the older GameCube development kit and reportedly pretty straight-forward, which helps explains how it has managed to take the lead just about everywhere. Wii takes less staff, effort and time per game, this should result in higher return of investment (read: shovelware).]
Remember kids, these publishers aren't here to point fanboi fingers, they want money: ROI!