This is a short list of games which by all means should have been localized, or at least announced for localization, because they would have sold, sometimes enormously, thanks to big fanbases in the west and quality content. But for inexplicable reasons their publishers thought it would be wiser to limit their audience to a single country, Japan.
Fatal Frame: The black haired shrine maiden
A mystery survival-horrorgame with stellar graphics for the Wii U which is in desperate need for every additional title. It makes no sense whatsoever to not localize this.
The Idolm@ster One For All
A phenomenon in Japan which also has a big followship in the west, which is present in multiple forms like rythm-games, an anime, live-concerts, etc. There is no way Bandai Namco wouldn’t at least break even, especially considering the amount of pricey DLC most hardcore fans would buy.
Puyo Puyo Tetris
Allegedly the best Tetris game there is, with little translation effort and the possibility of a huge success as a cheap downloadable game. Still no dice. Reason: Sega.
Phantasy Star Online 2 / Nova
An awesome, popular and revered games series, so why wouldn’t you want to localize it and make lots of money? One answer: Sega
Yakuza 5 / Ishin
One word: Sega
Possibly the most popular Visual Novel ever and there is no commercial release of it. Just let that sink in.
Certain kinds of Visual Novels for the Vita sell well in the west, look no further than Danganronpa 1+2 and Virtue’s Last Reward. It’s a mystery why Level-5 wouldn’t localize this game when 999 and VLR showed that those kind of titles can perform better in the west than in its domestic market.
Dragon Quest VII for 3DS
“It’s not Final Fantasy”, I guess that’s Square Enix’s main reason to not publish this title in English. Also it wouldn’t sell 5-6 million copies and therefore would only create a smaller profit.