Localization is an underappreciated aspect of game development. There is a lot that goes into localization such as redesigning cover-art, censoring parts of games for cultural sensitivity, and recording new voice-overs in the target language. The most important job, however, is translation of the in-game text and especially the dialogue. A good translation will be transparent with natural language, puns, and jokes that work in context, and lack any unfamiliar cultural aspects. A bad translation will make you scratch your head wondering what something means or even unintentionally make you laugh out loud. Even lines that are understandable can feel unnatural and make you do a double-take.
In any case, it takes you out of the game and destroys immersion. This is particularly bad in role-playing games where players want to be engrossed in the world and characters as much as possible. It just so happens most localization is of Japanese games into English, and Japan sure does make a lot of RPGs.
Japanese and English are as close as it gets to having opposite languages. Not only does Japanese use an entirely different writing system, but the grammar structure is nearly backwards with regard to English as well. For example, the sentence "I went to the store to return this bad game" would be structured as "I this bad game return store to went" in Japanese. There are words for things in Japanese that we do not have and vice versa. So many words do not match up with their English translation because there are huge differences in nuance, tone, frequency, politeness, and severity. However, the vast differences between Japanese and English is just one concern localization teams have to deal with.
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