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The high definition market in Japan is contrary to game development. Not only is it split between two parties, but the low definition market is two and a half times larger.
When any developer decides to make a high definition game almost by default they must consider the global market. The high definition market in North America is seven times larger, and in other regions its four times larger. So outside of Japan the market is eleven times larger, and North America alone holds over half the console gaming market.

I think Square is on the right track on console gaming when they made the statements about thinking globally. Not only is their regional market comparatively small, but its also far more competitive. Just view the regional allocation for the PS2. Most specifically the game volume for the console.

This brings about a paradox for exclusivity. Going with the PS3 might help them domestically, but it costs them globally especially in the largest market. Going with the 360 ensures greater success globally, but poor performance in Japan. I think it will boil down to attach rates. The performance of the franchise within Japan and without. Were it done on fair comparison. Given the competition however Microsoft can probably make a better pitch then Sony.

First Microsoft is more apt to secure exclusivity with cash up front which helps to defer risk, or at the very least increase profit margin. Microsoft has every reason and need to do so. Purchasing exclusives helps them regionally, and helps them globally by giving them variety. Sony is somewhat more strapped for cash.

Basically I think the question isn't so much where the game would do better, but which party wins the bidding war. Whether Microsoft is willing to pay for the exclusivity, but on a somber note I think they are probably looking for more then timed exclusives in Japan now. They are looking for real exclusives, and they probably want to get as many as cheaply as they can. They are not getting Final Fantasy so they need to find half a dozen real exclusives this year.

I ask the fans do you think its worth the money for Microsoft to secure this title as a real exclusive?