I'm here to review them both briefly, but also rant a bit about how gamer fanwank ruins everything.
There are a lot of farm simulators, but one ruled above them all, at least if Nintendo was your platform of choice: Bokujou Monogatari, produced by Marvelous Games in Japan. Waaaay back when this series started and the first Bokujou Monogatari was produced I believe for the original GameBoy, the relatively new and small Marvelous hired another game company to do localization and distribution in the United States: Natsume. Natsume chose to title the US-English version of the series "Harvest Moon" and obtained and owned the trademark to this name as well as some other related titles and phrases.
Over the decades, Marvelous grew. They hired a different company, XSeed, to localize Bokujou Monogatari's sister series Rune Factory. Eventually they were able to purchase XSeed to make it an in-house subsidiary. Marvelous made a pretty standard video game company decision: it would be cheaper and more efficient for them to use their now in-house subsidiary to do all of their localization work. So Marvelous decided they would no longer hire Natsume, still successful and independent in its own right, to localize Bokujou Monogatari. Marvelous did not offer to buy the Harvest Moon trademark, and instead opted to distribute future English versions of their game under a new trademarked name: Story of Seasons.
This left Natsume with the trademark but no game. They are a game company just like Marvelous, and just like Marvelous, need to make business decisions based on issues of efficiency and profitability. To recover from their loss of work from Marvelous, and because they already owned the trademark to Harvest Moon, they would make their own Harvest Moon game.
People who are reasonable, sensible, mature, and generally happy people decided to take this as fabulous news, because it meant they would get two farm simulation games for their Nintendo devices rather than one.
People who spend most of their time being grumpy and miserable on the Internet in between occasionally actually playing games have decided this is the worst thing that has ever happened in the entire universe, that the world might as well just END, and that most of all, even though this was all sparked by a business decision made by Marvelous, the whole situation is for some entirely incomprehensible reason, Natsume's fault. I recognize these people are irrational, insane, and inconsolable and nothing I say will convince them to change their minds on this. I'm not trying to change anyone's mind. I'm just taking note of how STUPID this is, and how unncessarily DAMAGING this is to the franchises.
My biggest gripe about the ensuing gamer fanwank is that many, if not most, online fan reviews of both Harvest Moon: the Lost Valley and Story of Seasons are entirely unreliable and unhelpful. Many of them were written before the games were even released, and the details (or lack thereof) in such reviews reflect that even many post-release reviews are written by people who haven't played the game at all or, if they did, only played for about an hour or so (and experienced simulation gamers know it takes several hours to get a feel for how such a game will work, especially since the first hour is usually tutorial). Many Lost Valley reviews contain general hyperbolic "This is not the real Harvest Moon!!!" ranting without useful or accurate information, and many also feature misinformation if not outright lies about what the game contains (my favorite example is one where the review claims that you cannot care for any animals in The Lost Valley right next to an obviously stolen screenshot from the game featuring the main character tending to his livestock that are, clearly, obviously available in the game. Likewise Story of Seasons gets mostly positive reviews simply because it is Marvelous's game and not because of outlining any particularly good, useful, details of what the game does and does not accomplish. This means new players and old ones alike can't get a good sense of what the games are really like--even a positive review can do harm if it is inaccurate, because if a buyer purchases it based on false expectations, he or she can only then be let down.
Somewhere in this nonsense I think is a matter that some longtime Bokujou Monogatari fans didn't like some of Natsume's localization work, but none of this has to do with the work EITHER company is doing now. Further, most of the biggest localization issues are from games 10, 20 years ago--the most recent games Natsume were just fine. The whole situation seems to be largely fueled by ancient, pointless, grudgewank that is entirely irrelevant to the current situation. Yes, it's annoying Cute had censored content. It was also a really long time ago.
If anyone happens to find this page in the vast sea of junk on the Internet: I own both games. I've played Lost Valley's plot to completion but am still unlocking/experimenting/making things; I've played Story of Seasons for not as long but still through a few seasons to get a good sense of the gameplay. I have no especial loyalty to either Marvelous or Natsume. For whatever it's worth, this is what I think of both games:
In short, Story of Seasons is better for story and characters. Harvest Moon: the Lost Valley is the better farm simulation. The former is better for playing with economics; the latter is better for experimenting with crafting and planting methods. If you want to play a cool story with a large cast of characters and a town that is pieced together with some farming simulation and time management game play, play Story of Seasons. If you want to play a game with a heavy central focus on your farm and land management and want to get into more robust planting mechanics and crafting, then play Harvest Moon: the Lost Valley. If both sound up your alley for different reasons, play both. And indeed, the more good farming sims and the like purchased, the more we'll see more of such things for the Nintendo 3DS and other platforms.
Story of Seasons takes place in a town which is trying to boost its agrarian economy and you have been hired to help. As with other previous games by the developer, farming isn't just about farming's sake, but also about helping a nearby town boom and assisting its residents. As you are successful, they also become more successful. As in prior games in the older franchise, each character is very deeply well developed and there are lots of bachelors and bachelorettes to romance, with some complex dialogue options. Town life is its own part of gameplay connected to but different from life on your farm. Even the farming becomes social, because in this particular game you have to compete with other farmers for additional land to cultivate, and this competition also is geared toward not helping your farm's success but also helping you develop deeper relationships with your friendly rivals. The farming simulation aspect is as good as it always was but--at least as of this writing--there's nothing new they haven't done before, and it's pretty simplistic. Crops only grow during their season, animals have a set personality and while their products improve as they grow to like you they otherwise don't change, unlocks are based largely on sales and the passage of time, and pretty much as long as you water your plants there's not much you can do to change things or mess things up. There's, as you get later into the game, crafting of products. There's honey making. There's bug collecting for when you want something else to do, and fishing and the all new mechanic of swimming, which is basically fishing where your character gets wetter. It takes a very long time to unlock other animals besides cows, although horses come pretty quick, although if you're good at milking the system (*cough*) you can get there faster. The game uses Harvest Moon: A New Beginning's crafting and building system for your farm (maybe you can edit the town later but I'm not sure). There is good character customization, and as with A New Beginning clothing and hair unlocks for all genders. There's a new trade system that on one hand makes buying and selling most interesting, but on the other hand, ordinary shipping is taken away so you can't make money every single day until perhaps late in the game when more traders arive. What makes it most fun, for me is the town and story and how everything connects together. Absolutely the farming aspects are fun and it is good gameplay, but it is not where I find the most interesting challenges and intrigues.
I like: Some of the trade system, the character and stories, the town, the romance system, the variety of activities, and full customizability of your main character.
I dislike: The hugeness of the world--there's a lot of schlepping even with the horse, little change/challenge/variety in the simulation aspects, how long it takes to unlock or access certain things, there is very little resource mining.
I am "meh" about: "Conquests" i.e., fighting over public land with your farmer rivals.
Harvest Moon: The Lost Valley is heavily focused on a young farmer and the land he acquires in the Lost Valley, pretty much by passing out on it and being handed the "deed" to it by a Harvest Sprite. The farmer must grow a variety of plants and raise a variety of animals to energize the land and find a way to break it from a curse of eternal winter. The "town" of this game is offscreen; rather, residents come to the Lost Valley to trade and interact with the farmer and explore the Lost Valley as the farmer brings it back to life. The premise of the plot--the land is cursed to be eternally winter and the farmer must gather artifacts to bring back the seasons--is intriguing if fairly standard for a harvest-based fairy tale, and brings an interesting time management challenge to the world, but it is frankly, a bit shallow. It usually takes the first in-game year to fully complete, which isn't that long; the final challenge to "beat" the plot is annoying as it requires the random appearance of certain items however, which is annoying. There are fewer characters and while they have some cute personalities, they are not as well developed as in the Bokujou Monogatari games, and there are far fewer marriageable candidates. Some characters do get some interesting backstories but it takes a very long time to get through them. Rather, the focus is on the farm itself and what you do, with the townsfolk largely being to some extent, entertaining window dressing. The farming simulation aspects are where the game shines. You are able to edit terrain--people compare it to Minecraft although that's more for the blocky appearance of the terrain, but the point is less random building and more altering the terrain to both access places like mines as well as, moreover, to affect how your farm flourishes. This game really pays attention to important things in farming: land altitude, irrigation, time of year, fertilization types, and soil drainage. Your plants not only thrive in different seasons, but also in different soil/irrigation types and land elevation. Moreover, beyond helping plants thrive in this way, you can also cause your plants to mutate! Ergo, unlocking seeds is not simply a matter of sales or a certain amount of time passing, but your own ability to experiment and work within the system to get new plants. Planting spinach in watery terrain yields savoy spinach; planting strawberries in winter gets white berries, chili peppers transform into jalapenos when in ideal heat and well drained but not dry soil. While plants will still die at the end of a season, you can actually plant all plants every season, and doing so also affects mutation results. You create not just fertilizer but different kinds of fertilizer and these things too can affect growth in different way; fertilizing something with just manure ("compost" in the game--but it's awesome that your livestock raising also helps you raise your plants better) is different from mixing compost with berries, or fish, or what-have-you--which adds interesting incitement to experiment and try all kinds of things. Raising livestock is also a little more complex in a good way, in that you can craft custom feed for your animals, and the different kinds of feed affect both the quality of your products as well as the personality traits of your animals--you of course still have to be good to them too, but the feed and training adds a new aspect to the game that is welcome. There are fewer animal types in the game but you "unlock" them fairly easily and quickly which allows you to get to product and food production faster, which I like a LOT. You also chop, mine, and fish, and ALL activities you do feed into one another nicely (you can turn fish and compost into fertilizer, you can use crops to make special animal feed, and of course eventually all things can be cooked into useful dishes). Mined materials and all farm products are also used to build and craft as usual, and you can edit your property extensively beyond the terraforming function. You could play the game for a very long time just getting your farm the way you like it and unlocking as many seeds and products as possible.
I like: The increased challenge/complexity of the farming system and that you can do more with your animals; the customizable terrain (and that that also has an effect on your farm), that you don't have to waste time on artificial pacing crap like upgrading your tools, that you spend your time on your farm and don't have to schlep all over the place to do things (the land you work on is pretty big on its own)
I dislike: The shallow plot, the 3D movement making some of the context sensitive menus work wonkily, less customizable MC.
I am "meh" about: Hiring harvest sprites to help you farm, getting requests for hard-to-mutate items at the wrong time of year, etc.
What both games have in common: festivals, fishing, gardening, livestock, making products from your livestock's items, crafting, building relationships, a slow start, and a cruel random number generator (all of which are typical for these types of games).
If one sounds more appealing to you, cool--just get that one. They are both good games, IMO. I think there's great room in the world for both of them so those with different preferences each have a game they might like and/or can play both for different reasons. I just hope future games from BOTH developers are both collectively approached with open minds and reasonable expectations.