I think Microsoft really needs to come out with a lot of first-party games that appeal to a Japanese audience. Sony doesn't have to do this so much. Look at the stats.
Sony only has three Japanese games (Gran Turismo 5 will soon join the list) that sold more in Japan than Blue Dragon (Microsoft's biggest IP in Japan)
1. Gran Turismo 5 Prologue 0.57m
2. Hot Shots Golf 5 0.52m
3. White Knight Chronicles 0.37m
Rest: Western games or niche Japanese games that don't sell well
It is very clear that Sony heavily relies on Japanese third-parties to sell the system for them (in Japan). M$ doesn't have this luxury. Since M$ can't trust that major third-party titles will remain exclusives (ie. Tales and Star Ocean), they gotta team up with Japanese developers to create new first-party IPs (like Blue Dragon, Lost Odyssey and Infinite Undiscovery). M$ is going to have to go above and beyond Sony's first-party efforts in Japan. They have to go with the Sega strategy. Win over market share in Japan with a strong lineup of Japanese first-party games. But is M$ going to have the patience to do this? I doubt it. It's going to take a lot of investment and a lot of time to do this. But every multinational corporation understands that if you want to expand your market, that time and financial investment is necessary.
You can't just pay off Japanese publishers to release timed exclusives. You have to make the effort to build a proper first-party lineup in Japan. Square-Enix is not going to make an exclusive Final Fantasy or Kingdom Hearts for you. Konami is not going to make an exclusive Metal Gear Solid for you. If you want something done right, sometimes you gotta do it yourself (publish games for Japanese developers. Don't rely on other Japanese publishers to do the work for you in exchange for a moneyhat. Not an efficient way to spend money).
Secondly, it wouldn't hurt for Microsoft to market their western games more and market them effectively. I suppose it might help. Why not? Though it seems like historically, western games don't move hardware in Japan. Even with Crash selling 1 million+ in Japan, I doubt many Japanese gamers said, "I MUST buy a PS1 to play this game!" (like they did with FF7 and what not). GTA4 sold 330k on the PS3 in Japan (ranked #11 in JP PS3 sales) but honestly how many Japanese gamers were like, "zomg, I must buy a PS3 just to play this very violent western game!" No. It's more like, "ah look at that violent western game that broke records in America, seems cool, I'll buy it for my PS3." (meaning they bought the PS3 for Japanese games, western games are just gravy). There probably are Japanese 360 gamers who are like "zomg, I must get a 360 to join the fight with Master Chief-san!" or "yes Marcus Fenix is a bad ass mofo! I'm going to buy a 360 right now!" but these are the hardest of the hardcore gamers in Japan.
However, by hyping the western gamers properly and making them seem appealing to a Japanese audience, you're adding one more positive to the console's overall library in the minds of the gamer. And that counts for something. Sega focused on building a strong overall library (it wasn't like they were just pushing 1-3 killer apps) and building the hype for that library on the Saturn and it worked. It was pretty successful. Didn't beat PS1 but hey, they sold 5 million+ in Japan (and the number would have heen higher if Sega didn't quit the 32-bit game prematurely) and they beat Nintendo over there. So the focus for M$ should be to build their overall library and build the hype for their overall library. If M$ can eat the losses in Japan. Unlike Sega (who couldn't eat the losses from their failed western Saturn venture).







