So, what's bad about this game? Well, for one thing the steam mecha are underutilized. Color schemes aside there isn't a whole lot of other visual customization. Mechanics-wise only the signature weapons of each character make a difference. Here too the designers drop the ball. I'm cool with the idea of these mechanized soldiers using traditional Japanese arms since the damage isn't done so much by the weapon itself, as a psychic extension of the character. In other words, the weapon is a focal point for the character's innate power. If you still have no idea what I'm saying go check out this clip on weirding modules from the film adaptation of Dune. So, speaking in-universe it makes sense that something like an ancestral sword would better suit one of these psychic warriors than a more conventional weapon. Unfortunately the game seems to abandon this idea shorty after introducing it since some of the characters employee pretty silly armaments, such as a holy-cross shaped machine gun or steam-powered laser beams. It's a pity because there's more than enough variety to feudal Japanese weapons. Off the top of my head we got a single katana, a daishō combo, the long-bladed ōdachi, the neither-here-nor-there nagamaki, the naginata, the yari, and the kanabō. Worst comes to worst getting down and dirty with Aikido, Judo or Karate are also viable strategies. After all, watching mecha duke it out (while causing extensive collateral damage) is one of the highlights of the genre...which is also why it's disappointing that Sakura Wars uses a bland abstract hit point system rather than location specific damage modeling.
Despite one failed attempt to market the game overseas it sounds like Sega still clings to the hope that Sakura Wars will find a substantial audience overseas. The only way I think this can happen though is with a re-imagining of the franchise. Replacing demons with the Cthulhu Mythos would go a long way toward giving the setting a time period appropriate threat. Instead of romance being the main theme, I'd make it a secondary to keeping the team (of equally mixed gender individuals) alive and sane. At the same time the setting should avoid getting too grimdark since the key theme of Sakura Wars has always been a blend of comradery and nostalgia. Turn based strategic combat and a specially trained unit formed for the sole purpose of fighting off cosmic horrors might scream X-Com to some people, but I think this too should be avoided since distinctly memorable characters with compelling story arcs is the series strong point.
Like a lot of Japanese media, Sakura Wars represents a combination of interesting ideas tailored to an overly insular market. Sure, the "Otaku" crowd love it, but I find myself agreeing with Miyazaki Hayao when he says they're what's holding the medium back. Then again with a fresh perspective and a bit of creativity this landmark series could bloom again.