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FastFord58 said:

You forget that Japanese devs are pondering breaking into the western markets as they grow bigger. So there is a disparity in Japan; who cares? The big money is in NA and EU and that means multiplat even if a game sells like ass in Japan on 360.

Japan is such a miniscule part of the big picture anymore. It doesn't really make sense to give that region as much weight as we did in the last generations. Their games are mostly a dying breed. Save for just a few benchmark titles, game making really is a dying and antiquated art over there. I would go so far as to say they are becoming game makers for a very niche market because they refuse to adapt to a changing market.

MS has arguably shown better advances in Japan this generation than the other 2 established brands. It wouldn't make sense for them to pull out now.

Totally agree with the above post and would just simply like to add...  Do they really have a choice to pull out? 

If they pull out now they give up that market not this just generation but each and everyone that follows...  Personally, I don't ever see them winning it (not that they need to) but their presence in the market is a must if they want to 'win' elsewhere.  Aka they need to keep waving their hands in the face of Japanese developers so they do get some exclusives and mutlplatform releases.