onarliog: I don't know. I am a firm believer that western game design, both technical and creative aspects, was significantly lacking behind the Japanese competition from the inception of game consoles up until the recent rise of the western indie scene. I can't help but think that Atari is yet another example showing that we western folk simply "didn't get it".
This may not be a fair comparison. The Atari 2600 released in 1977, the NES in North America in 1985 - 8 years is a lifetime in electronic technology. It was released in 1983 in Japans (still six years - still a lifetime). The Atari 2600 actually has some very impressive and elegant design that still impresses and confounds people today.
On the game design side, Japan gave us Space Invaders, Pac-Man, Galaga, Donkey Koing - but western developers gave us Defender, Q*Bert, Gauntlet, Ms. Pac-Man, Pong.
I am not sure what the recent rise of western developers is (NES North America, 1985, to PS2, released 2000) was 15 years, but since PS2 Western developers have made GTA III Battlefield, Medal of Honor, Need for Speed, Burnout, FIFA, Madden, NHL, Ratchet and Clank, Sly Cooper, Jak and Daxter, God of War, Halo, KOTOR, Fable and a many others. So more than half of modern console existence, so am I am not sure by what you mean recent.
But go back to the NES days and they were there too. One of the earliest and best success in Japan on the NES was Load Runner. Nintendo limiting developers to five titles a year under a single banner, buying all the cartrdiges from Nintendo, with minimum orders - a shortage of cartridges which led to a major lawsuit with Tengen/Namco and the Big Ns bias toward Japanese companies kept many off the NES. Dragon Quest was because of Western CRPGs. That then created Final Fantasy, so the west was doing a lot, just most on PC.
By SNES/Genesis days rare was making Donkey Kong Country, EA had Madden, FIFA, NHL, General Chaos, Road Rash, Acclaim put out Super Smash TV and Mortal Kombat. Blizzard (then called Silicon & Synapse) made Rock & Roll Racing and The Lost Vikings.
PS1. Diablo, Wipeout, Spyro the Dragon, Crash Bandicoot. But PlayStation opened up the market to all developers, so that is why you saw an increase.
But western devs have always been around and making great games - just not cobsoleexclusive, especially when Nintendo was so restrictive. Games like Ultima, Planscape, Baldurs Gate, Diablo, WarCraft, StarCraft, Roller Coaster Tycoon, Civilization, SimCity, The SIms - Oh heck, just take a look at the Good Old Games catalog!