There's no denying the declining popularity of the niche sub-genre. Sad but true.
Contrary to popular opinion, there's more than one reason for that decline. The industry's priorities have shifted, the Western markets have started to dominate, and the amount of effort put into many JRPGs this generation has been embarrassing.
For example, take the recent gigantic letdown known as Time and Eternity . It's hardly the only example of a JRPG that shows an appalling lack of progress on the part of the Japanese developers. But it's certainly one of the most jarring. This is because of why the game is bad; it's not due to an ambitious attempt at something special, which ultimately fell flat due to a lack of time and resources. This is due to a total lack of either effort or talent or both. You could just sense that everyone involved in that production was…bored.
Now, there are still plenty of die-hard fans out there. They'll continue to support the ailing genre because of the great memories they've accumulated over the years. And many still hold out hope for a renaissance of sorts. After all, we did get Ni no Kuni: Wrath of the White Witch , right? It just doesn't seem like many designers are taking the cue, and let's face it, the acclaimed title didn't sell as well as many anticipated. So, even when there's a great example of what could be done with that genre, it's as if there aren't any game makers willing to give it a go.
In the future, everything will continue to shift. It just doesn't seem likely that JRPGs will survive; at least, not in the strictest sense of the term. Role-playing games made by Japanese companies probably won't die out, but what we've come to know as "JRPGs" may eventually disappear. And at this rate, maybe that wouldn't be a bad thing. I don't think I can handle another Time and Eternity . That was just brutal.