Never worked in the area before, but from what little I've seen, my understanding is that more and more game companies are relying on localization agencies rather than maintaining an in-house staff, and (again, as far as I can gather), in-house localization staff were only maintained in the very biggest of markets, anyway. Also, it seems that most localization agencies are located in the target language's country (i.e., companies that translate from Japanese into English tend to be located in the United States and other English-speaking countries).
Check out this
website by a freelance dutch translator specializing in English and Japanese. He has some interesting stories under "The short story" and "The long story" headings on the sidebar on the site's left and explains about some of the downsides for a video game company in choosing an agency to do the translation.