note: This entry began it's life as a response to a a GameThink Post

I don't think I agree with your assessment of the difference between the sources of power in Western vs. Eastern stories. Yes, the one true ring was a source of power, but as with Crouching Tiger Hidden Dragon, the material source of power ( The jade dragon ) was not the thing that made the character great. The true source of Frodo's power was not in the ring, but in his ability to be a great person despite the ring. The same is true in the King Arthur story. King Arthur was not defined by Excalibur, he was a great king, who was a great man, and happened to have a magical sword.

I think that the one point where Asian stories could be seen to differ vastly from Western Stories is the starting point.

In most Western Stories, the story begins with the protagonist just beginning to establish himself. Luke Skywalker must rise above his humble beginnings as a farmer and become the Jedi he is meant to be. King Arther starts out as Arthur, Squire to his adopted brother, and must rise to King of the Britons. Frodo starts as a young carefree hobbit and must rise to defend middle earth.

In Eastern Stories, we join a protagonist on the downslope of his career, and we slowly explore his history, as it relates to the current story. Kambei Shimada is a well seasoned Samurai, who must overcome his private demons to defend his town. Master Li Mu Bai is a great warrior who must defend his title and those he loves from a young upstart who seeks to steal his sword and his life. Turning to less "epic" material, The defining anime characters are those like Vash from Trigun, Spike from Cowboy Bebop, or Alucard from Helsing. These are people who have already reached the top of their game, and are seeking to defend their title, or reclaim some small part of that indefineable essence of why they began on their path.

The fundamental difference between Eastern-themed games and Western-themed games is easy to see when thought of from this point of view. To fairly compare a Western-style game to an Eastern-Style game, you would have to compare the eventual epic level characters of a D&D universe to the starting characters of the Exalted universe. The examples you cited (Exalted, BESM, Feng Shui) all allow characters to start off with phenomenal cosmic powers, in many ways equivalent to a D&D character of the 15-20th level range.

This is where the inevitable disconnect between Gaming and Eastern-style storytelling comes up. Very rarely do the protagonists in eastern stories improve their abilities drastically over the course of the story. There is the occasional story about the mastery of a single technique which has eluded the protagonist for years, but generally the protagonists are no more "advanced" along their path at the end than when they began.

Ultimately, the best way to simulate an Asian storytelling style is to create a system in which the characters earn no XP, gain no levels, and don't generally develop new powers except as the culmination of a major storyline. In compensation, they would have amazing levels of power to start with.