My experience is a little limited, but this is what I gathered:
-Aside from a love for cute, mainstream tastes aren't that different from what you see in Western countries. Movies such as Lord of the Rings and Star Wars are mainstream there as well. Fantasy games such as Dragon Age or Skyrim probably wouldn't be considered too foreign, but they aren't massively popular because most videogames are seen as something for kids and young adults. (Once you're out of college, you're supposed to leave such things behind. Unless it's something extremely mainstream such as Dragon Quest.)
-There are gamers who are into shooters and the like, but these games are more niche over there. Some are released in Japan, some are not. Some sell fairly well (something like 100,00-200,000 copies isn't too shabby), some don't. There might be a long wait. Avid fans might import games from America, and there are magazines that cater to these gamers. IIRC, one of the reasons GTA broke through the barrier is because importers were so enthousiastic about III and IV. GTA IV was heavily promoted by Capcom and topped the charts for a while. You could say one of these reasons these games are popular is because they're so over-the-top foreign, but not in a completely unfamiliar way. On a side note: Legends of Localization [http://legendsoflocalization.com/a-peek-at-japanese-grand-theft-auto-localizations/] compared a view scenes from the Japanese version to the original. Fun and interesting read.
Edit: nearly forgot:
-More often than not, localisation is done on a small budget and games rarely get a decent amount of marketing. For instance, games might not have a Japanese voice track and are subtitled instead. As a result, these games are only noticed by players who keep up with the industry by reading magazines and such.
Edit 2: Oh, and this, too:
-M rated games often end up recieving a Z rating in Japan, which is the highest rating there (CERO goes like this: A, B, C, D, Z). Z rated games can't be sold to people under 18.