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To be fair to the original XBox it only got 4 years from Microsoft before they basically killed it off to make way for the 360, which will have had 8 years on the market. 

As for Japan, it's irrelevant to Microsoft now, when they were trying to break into the game business in 2001, Japanese publishers were much more powerful and it was thought you had to have Final Fantasy and Metal Gear to dethrone Sony. Well MS got basically those franchises now.

Monster Hunter is primarily a handheld centric franchise. 

Japan in general is a handheld centric nation now, the 3DS is the main "console" for a lot of people. 

When MS dumped Mistwalker, I think that was a telling sign that they were washing their hands of the Japanese market.