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I'll admit I only skimmed your post. Something that stood out was "Japanese developers that want to make HD games into developing exclusively for the PS3 (when you know you are going to sell 2.5 million copies on the PS3 as opposed to 250,000 on the 360,"

Which ps3 game sold 2.5 million that only sold 250k on 360? And as fastford said above me, japanese devs are trying to penetrate the western market, which currently is being topped by the x360.