To answer this question, all we need to do is look at when the 360 was first launched in Japan.
This chart can be found here.
Now, notice anything odd? Like...the complete lack of any games that would appeal to the Japanese? Microsoft didn't even have Dead or Alive 4 ready for the Japanese launch, the one game that the Japanese would buy in even the smallest numbers. If memory serves, the 360 started out even more slowly than the original Xbox. And that was when Microsoft sealed their own doom in Japan.
You can't have an appealing console without an appealing launch. Even Sony, who really messed up the PS3's launch in several ways, had Resistance in America and a Gundam game in Japan. The 360 had pretty much nothing to offer. And then, Microsoft practically ignored the system for a full year, finally releasing Blue Dragon at the end of 2006 in a desperate attempt to salvage the 360 in Japan. But it was already too late. Even the string of big exclusive RPGs (Infinite Undiscovery, Star Ocean 4, Tales of Vesperia) failed to bring the 360 to any level of significance in Japan. Microsoft can fight as hard as they want for more sales and marketshare in Japan. It just won't do. I love the 360, and I wish it was more successful in Japan, but it's not going to happen. Microsoft ruined its chances long ago.
