The question is not why is Xbox 360 failing, it's why is Wii succeeding? We always used to proclaim that N64 and GameCube would have been more successful in Japan if they only had the right RPGs. Instead of attracting more JRPGs, Nintendo changed the rules so that RPGs have become also-rans in that country.
Seriously, look at DS: It's RPG lineup was almost nonexistant until well after it became a huge hit. When games like Final Fantasy III finally came out, they helped hardware sales along, but Nintendo had already done all the hard work: DS outsold PSP regularly with non-RPGs like Nintendogs, Brain Training, and New Super Mario Bros.
Of course, RPGs still have a huge cult following in Japan and I believe they could drive the sales of the Xbox 360: if only it could get an RPG that actually mattered. I mean, really, Xbox needs Final Fantasy and Dragon Quest, not Random Fantasy-Sounding Words Strung Together: An Original RPG by Some Jerk who Worked on Final Fantasy Once. Even then it would be an also-ran compared to Wii, but maybe it could make a dent in PS3.
