It seems retailers are the sort to judge a game by its cover as XSEED let word out that merchants don't like to stock games with cutesy graphics.
This coming from the publisher's Facebook page after someone requested a game called Zwei to be localized. Zwei has your usual assortment of cute elements from the promotional art alone: pretty anime girls with big fancy clothes, varying hair colors, and a kitty cat mascot character.
It's typical to see that sort of thing in many Japanese titles while elsewhere we'd see musclebound men standing proud with big guns or swords. Not that the latter is a bad thing all the time as we have some genuine badasses like Mass Effect's Shepard or God of War's Kratos.
Could it be that retailers would be more open to cute stuff from successful publishers? Pokémon and Kirby are some of Nintendo's big sellers while Squaresoft puts out the Chocobo series and the "chibi-fied" Final Fantasy remakes on the DS. Maybe all XSEED needs to do is improve their track record.