The 360 has a number of factors going against it.

1: The original xbox. Which didn't have many Japanese games at all.

2: Hardware reliability

3: Lack of positive brand recognition

4: The changing to a more casual Japanese market. Microsoft did the hard work and got lots of jrpg's on the system. I applaud what they're trying to do. But They're stuck between a rock and a hard place. They have the hardcore games but they don't have the casual games. They need both.

As someone who plays around 85-90% japanese developed console games (as well as being an anime otaku) I also just have far too many reasons not to get a 360.

Maybe the Japs have a massive grudge against America?

^ That's a bad thing?

Dude i'd love one of those

@ Jessman

No, that's not a crucial factor (I think Microsoft's reputation far more so):

iPod Takes Japan by Storm
http://www.businessweek.com/globalbiz/content/feb2006/gb20060223_774050.htm

The 360 just isn't very appealing to the Japanese.

Why they fail epically?

It's simple really. But what is more important, is that this question, to me, shows the same misunderstandings as for the Wii. People asking this, and giving answers, usually are burying their head in the sand.

If you didn't notice, you said "they have the best selection of jrpgs", which is just not true, but is a good hint to spot people that have their head buried in the sand. That's because this is not true, at all. But as the people asking these questions believe their own BS, they can't ever understand why it doesn't sell better.

IMO, the reason is that the XB360 doesn't appeal to japanese tastes. I have tastes very in line with japanese ones, at least on these kind of things, and to me, the XB360 is the antithesis of japanese tastes. I already said it before.

You can spot this just at reading USA XB360 fans. To them, graphics that go toward reality, like Gears of War or Halo or other things like that, are the real thing. They'll talk about realistic lighting, effects, AI, everything that can make their games more real. While they'll disparage "anime" games in every way, they will call cell shading graphics gay, ... Man, some even made thread about having trouble going in a store to pick Eternal Sonata because of the cover! (how insecure can one be?) This is the antithesis of japanese tastes.

And when you look at the XB360 lineup, everything looks like designed to scare off japanese people.

Look at the JRPG selection, there are several ones that have no japanese appeal at all.

The goals of the XB360 just go against what is needed for a japanese type of console.

There are a lot to say, but this is already too much negative things to make this console a must for japanese people.

Do do do shiyouze ... ja nai 

As bad as people have been on MS in the US over RROD it is a much bigger deal in EU and Japan. No amount of new IPs will help that; Japanease or not. Also the Japanease are really favoring known entities right now, so while Blue Dragon and Lost Odyssey are nice, it is the effect of Tales and Resident Evil I would be more interested in.

The Xbox brand has represented exactly what the Japanease market was moving away from.

For the next gen there are some major things they can do.

1. Hold off- Don't worry about getting to Japan first, it won't help. What will help is a reliable system with lots of games, one that isn't a huge size or sound like an air-craft carrier.

2. Game Partner- Help from a few eastern devs is not enough. They need to have an exlusive relationship with one of hte big ones.

3. Tech Partner- Also partner with a Japanease tech company like Toshiba. It would go a long way to assuading peoples fears about reliability.

4. Portable Games- Making a portable game system is probably a bad idea given the competition. But getting your IPs on the systems with the most gamers is the best way to advertise. They junked a perfectly good Halo DS game. They should have pressured the devloper to get Blue Dragon DS out around the same time as the console game. I really don't feel multiplatform DS/360 games are going to harm them in Japan.

5. Big IP- The Japanease love them some Pokemon, Monster Hunter, Final Fantasy, and Dragon Quest. It doesn't matter what money it takes if Microsoft is serious they need to get a huge exclusive franchise. Those four are impossible but a truck load of cash might convince Capcom to give them RE6 as a launch title.

Because, unlike Americans, the Japanese aren't inclined to take it up the ass with extraordinarily high hardware failure rates?

 Right, the Japanese don't import any culture from America... none at all!