The issue with Microsoft jumping in right away expecting things to work just like Sony is a big issue to the Japanese. I'm not sure all of you realize what kind of statement or how they might have approached the royalty issue. Given how American business works if Microsoft went to publishers and made such an offer at the beginning or even long after first approaching them it would come off exactly like they are buying loyalty. For a Japanese business it takes time, subtlety, and a very indirect approach to such an offer. The cultures are so different that it really isn't a surprise than an American company would have difficulty penetrating the market. We are highly likely to offend them in business encounters unless calculated efforts are made.
So it isn't unfair or favoritism in the way we might see it. It was most likely abrasive and too disrespectful. Japanese business is something you need to court and it takes a long time to prove yourself.
Before the PS3 everyone was nice to me :(
