I'm not sure what to think about Japan for MS anymore. I think once I saw FF13 wasn't going to be released in Japan on the 360 they half given up on Japan with the 360 in terms of JRPGs. I understand it wouldn't sell much in Japan on the 360 but it would have given people more options and It seems like MS didn't really care about that.
But we'll know for sure if Lost Odyssey 2 ever gets released and how Natal effects Japan. Otherwise I think MS will give Japan another shot with the next XBox but will play it cool for now.
It's just that simple.