.....Because Japanese developed games do best in Japan?
Microsoft has always had a drain, and no hold over Japanese developers - they get a few exclusives here and there from Namco, and Capcom.
In the West, they have virtually everything - how many developers in the West develop tons of exclusives for the Wii and PS3? Very, very, VERY few.
MS has the chokehold on Western developers. But it's bigger than just Japan: Microsoft is gaining traction in Asia. Taiwan, and South Korea, by all accounts, are not folding to the PS3/Wii as quickly as Japan. These countries enjoy Japanese games almost as much as the Japanese do - so your adding increased hardware sales in multiple countries by adding to the J-Dev's making more X360 games.
So if MS ever wants to be well rounded, they need Japanese developers. In order to get Japanese developers, they need to move more hardware in Japan - go look at the Sega Genesis for the reasons. Sega had no traction in Japan, because Nintendo had a chokehold on developers. Because of that, Sega lost out on alot of Japanese sales, and it eventually trickled down to US and European sales.
*gasp* some Japanese games do well in the US and Europe too! Microsoft might want some of those sales, rather than the Wii/PS3 sucking up all of those sales.
Back from the dead, I'm afraid.
