Nobody cares about J-RPGs. They stopped being a factor in the gaming industry a while ago and even if Xbox One bombs there, Japan as a whole is not a factor in sales anyway. It's all about dominated the developed countries in the west.

Obviously not the only reason, but a huge one.  Comparing one thing to another isn't always the way to go.  What other options from Japanese manufacturers do they have for cell phones?  Sony?  I am not saying that they areso xenophobic that they will buy their product if it is dramatically inferior to another.  Like you said, they have options.  M$ also doesn't support portables. 

If it wasn't some level of xenophobia for the 360, what was it?  When it launched, it had pretty good developer support in Japan.  The sales for the 360 aren't just bad there, they are horrendous.  That shows some type of bias that is beyond a normal "new brand" bias that should have been for the original xbox.

I proved people on this website that Japan is biased towards foreign eletronics and that got some people pissed off and reported me.

Korean eletronics struggle a lot there. Samsung had to re-estructure their presence in Japan because they couldn't convince Japanese to buy their products, same with LG.

http://mobile.nytimes.com/2013/08/12/business/global/korean-companies-gain-traction-in-japan.html?from=business

You don't have to convince me, I lived over there for more than 2 years and it was very blatent. 

They have plenty of perfectly viable Japanese options for phones. Sony's recent phones have been pretty top notch, along with recent phones from Softbank and Sharp (a couple of other Japanese phone makers). They also have access to all the same foreign phones we do, yet they still chose the American option. I'm actually quite surprised Apple have done so well over their, because unlike gaming phones are an all ages market. Once you get above 30ish, the xenophobia becomes pretty apparent.

Is it a reason for some of the Xbox's lacking sales? Sure, but it's still minimal. If there is one thing Japanese gamers are very good at, it's brand loyalty (seriously, their fanboys make the worst of ours look tame sometimes...), so if you present them with two nearly identical consoles (PS3 and 360), with the primary differences being that one is going to be getting most of the biggest series you grew up with, along with a blu-ray player (blu-ray is a much bigger deal over there than in the west. They love them some HD), it's obvious who was going to win. 

I should also note, that vast percentage of xenophobia in Japan is among the older generations (30/40+), whereas the large majority of Japanese gamers are under that age, which makes the point fairly null anyway (not going to exclude it entirely, because the phobia does still exist, it's just not prevalent).

It took Sony some of the biggest names in Japanese gaming to take down Nintendo over there with the PS1, so what chance did MS realistically have against double the opposition, yet without the big guns?

If MS had announced FF13 would be exclusive to the 360, it would have sold a heck of a lot more and gotten a lot more support (also, the internet meltdowns would be hilarious).

(Sorry if there are typos, it's 4am and i'm lazy :P)

The one problem with that is unlike Halo, it's both a timed exclusive and on PC.

“RPGs for me personally, that’s the genre I grew up playing, starting with the old Ultima series. Those are games that are in my heart."

+1