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If MS was smart, then 35 million would be enough to make Xbox 360 "healthy" - and that's exactly why they're being so stingy with the price-cuts. The hope is to stop losing money on hardware. If Microsoft can do that it can start making a profit in general.

I don't think MS can be #1 without Japan - but I don't think anyone will beat Nintendo this generation anyway. It can be well-off...even more than 35 million systems...without Japan, but that will take much stricter budgeting on Microsoft's part. Quit buying so many exclusives and maybe slash budgets on some new games. Make a profit on the hardware (or at least not a loss).