Something always gets lost in translation, but how much you lose of the game's flavor depends on how much you want to spend to get a good translator.

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Having done it myself, I find several big issues with Japanese -> English translation:

• Honorifics. Referring to someone with -kun or -chan or -sama or -bucho all have very different connotations. Sure, you could just include the honorifics as is but I don't think that many people unfamiliar with the Japanese language know what -kohai means.
• Culture: Even if the translation is perfect, characters may act in bizarre ways for Westerners. "He knows that guy is evil, so why doesn't he shoot him?" "Shooting people is very serious shit in Japan." "Well no one told me!"
• Puns: The big one. To give an English -> Japanese example, how do you translate the joke, "I no that!"? Joke being, the "no" implies that the speaker doesn't actually know what "that" is, with the "no" taking the place of "know" since they sound the same. "No" in Japan is "iie", and "know" is "shiru". They don't sound alike at all, so how do you do it? Japanese is filled with puns like this, and most of them are completely lost on Westerners.

That said, I do support translators for giving Westerners a variant of the Japanese version. But there's no mistake that a lot is lost.

I can imagine a lot of heartache and contention around where one lands with this. But I gotta be honest, my favorite Japanese properties are the ones where the translators took a lot of liberties and flexed some writing chops to make the most flavorful expression of something that fit what the creator was going for.

There’s a lot of Japanese/Chinese mystery games where suspects blend together because I can’t remember which person is Yuang Ho or Ryuiki Takachi. But I’ll always remember that in Ace Attorney, I play as Phoenix Wright, and am cross examining suspicious man Frank Sahwit. The cultural relevance of the changed names improves context learning. The series has been mocked for its adjustments, but I like them.

Other weird moments of creativity came from the dubbing team that did Ghost Stories as an “abridged series”, and the Trails in the Sky localizers that found a string table that duplicated “The chest is empty” for each treasure chest in the game, and decided to make each one a ridiculous message.

On the other end, there’s moments like the infamous quote in Rhapsody. The parentheses are part of it.

This is WhiteSnow, a town filled with snow. Enjoy the world of snow. (Note: This is what happens when you do a direct translation.)

Not every work can be translated into other languages very well. That‘s just a problem with cultural differences. I think writers should keep that in mind when they work on a global IP. Know your audience and all that.

Other times it really isn‘t as important as some writers may think. You don‘t need to know about Wukong to enjoy Dragon Ball for example. A lot of ideas are universal even if they don‘t sound as clever after being localized.

Maybe you just need better translators....

This reminds me of anime subtitles from the 1980s. Most of those I've seen are simplistic, boring, and sometimes misleading.

Bad translations still exist today, of course, but I don't run into them as often. I'm guessing that the growth of anime popularity in the west, along with increased translation budgets, have something to do with that. Better translators are probably doing some of this work now.

Losing a game's flavour in translation might be a challenge to overcome, but I don't think it's inevitable. Suggestion: Don't make translations an afterthought when producing a game. Instead, recognize that the words used to tell your story and illustrate your world effectively are your story and world, and seek out translators who are especially talented at conveying nuance and feeling. Accept that they are probably better than you are at communicating in their language. Give them room to be creative. Pay them well. You will probably get better results.

But on the other hand, if they don't translate it, will this leave the game unplayable for people not speaking Japanese?

Tell me more about this...puff puff

Games can be a lot harder to localize than any other piece of media since they're nonlinear. In many cases the localization team is just handed a raw text dump with no context of what line is from what part of the game, or even what character is speaking. Then it becomes a scavenger hunt to play through the game and find each line, but in something like a long JRPG that kind of scavenger hunt can miss a lot. It's not like how you can just read the book or watch the anime and fully cover everything.

But these days a lot of developers have started working closely with localization teams during development to help make their job easier. As they write the script, annotate it with detailed notes providing context and commentary, explanations of wordplay, cultural references, even advice directing the localizers on what you think they should do. And then stay in communication with the localization team, let them ask you questions as needed.

Good localization is hard, but I don't agree with Horii saying a loss of flavor is inevitable. Not when done right.

Typical Japanese superiority complex.