I have never encountered this before. Never. I have five game stores that are around a 10 minute walk from me that I frequent, and none of them do it. There are another 10 or so in the general area I like to go to, and I have never seen them do it either. Mind you, a lot of these are different stores, since there’s a huge mom and pop retail presence for games in Japan, but I’ve been to Book-Off, Bic Camera, the Daiei stores and the like, and I haven’t seen them separate Western games either.
Nor have I ever heard that from any of my friends, such a thing has never been mentioned when discussing Western games with people online (over here) and so on. You’d think if it were so pervasive as to hurt, I’d have seen it by now. Nope, everytime I look, Western games have been mixed in with ours and sometimes, they are the ones featured at the displays in the front of stores. (That’s how I got tricked into buying Jak & Daxter oh so many years ago.)
Now I’m not saying there’s no store that’s ever done this, obviously I can’t speak for every single store in Japan.
What I have seen is this:
-Where PC games are sold, often they be will broken into two sections: hentai and normal, if they offer hentai, that is. Hentai is obviously fenced off from all the other stuff. Since a much greater percentage of PC games than consoles games are translated from other countries, then it might look to a casual consumer as if Western PC games were segregated. It isn’t the case though.
-When import, non-localized, original version games are sold, yeah, then they are classified as imports. What brain-dead retailer wouldn’t do this seeing as how many aren’t compatible with Japanese systems or are in foreign languages?
-When Microsoft had the brilliant idea of releasing games over here for the Xbox without an ounce of translation, I did see retailers specify that there was no Japanese language in the games. What were they supposed to do, not warn their customers and face the backlash when they couldn’t understand the game they were playing?
In any event, it ticks me off when high-powered people who should know better mislead others like this.