Japan is great, but America is the biggest market. Xbox dominated last-gen solely because of the US alone. Whoever control the US market, control the domination of that industry.
What did xbox exactly dominate? 360 ended with ~4m ahead of Wii in NA market and yet they still ended up in third place +15m behind the Wii. Let's compare Wii Japan sales to 360 sales. +12m to +1.5m. Looks like not being able to sell anything in Japan hurt them more than being +4m in NA market.