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Very Simple:

Brand Image: The Xbox was seen as being bad due to the size, and lack of style (Japanese love style). So the 360 is still having to shed it's negative image.

Marketing: Microsoft isn't the best at marketing the 360. They got it right with Blue Dragon...Look at what happened. That was the best shining moment for the 360 in Japan.

Lack of supporting Japanese-centric games. Despite the fact that the 360 does indeed have a nice supply of JRPGs, it lacks depth in other areas: Platformers, Puzzle, and other East-friendly genres aren't quite there. Even then, most "traditional" games such as RPGs have taken a hit in Japan, and this is causing the 360 problems.



Back from the dead, I'm afraid.