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I take it all plausible third variables are accounted for in the paper? (Of the distinctions that could be drawn between Europe and the near Middle-East, "collectivism" doesn't strike me as necessarily the most salient.)
In Japan as well, people have a strong sense of in-group vs. out-group. It's not along tribal lines, exactly, but people who are extremely polite when the lines of demarcation are clearly drawn are often extremely less so when there are no clear group distinctions.
Note that in Japan as well as in the Middle East, it's certainly not the case that out-group members are treated impolitely in general. Quite the reverse; there are certain areas, such as hospitality, where one is supposed to be more polite to an out-group member. However, there are various boundaries, rules, and defined roles.
Societies that rely a lot on fairly formal standards of politeness and in-group versus out-group thinking seem to have more difficulty maintaining altruism in unfamiliar situations where the roles are not clear. That said, they may be more altruistic in general, both with insiders and outsiders, as the vast majority of interactions may take place along well-defined pathways.
It is of course ridiculous to pretend that tribalist, communitarian, and group-oriented societies are not based on materially significant relations of extended mutual advantage. For most people in these societies, the tribal or simple in-group (or in-corporation in Japanese society) relationships are ones of extended mutual advantage.
I don't think you meant that strictly, however. They are, we agree, missing out by not forming mutually beneficial relationships with more outsiders. The post begs the question of exactly how to quantify what they are missing out on.
After all, how realistic is the situation typified by such games and experiments? The vast majority of the time, people in more collectivist societies would be "playing the game" with people with whom they have a developed role and relationship-- something that even extends to be participants in a chatroom.
The point to me is not the ability to form mutually beneficial relationships, but the universality of being willing to consider new mutually beneficial relationships with strangers and with people in unfamiliar roles and ways; the dynamism, if you will. I think that people sacrifice a lot by not extending to a universal consideration of the human race, but I base that on moral grounds as well, and admit to a "feeling of warmth" for all my fellow humans.