It would be nice if they could penetrate a major market. But right now the Xbox has already achieved the most important factor in Japan: Relatively good support of Japanese Devs. Thanks to it's healthy numbers else where in the world, it just makes sense for Japanese devs to at least make some of their PS3 games multi plat.

Sure, the numbers and support could stand to increase, but it looks like that will actually happen. The box might never even reach Dreamcast numbers in Japan, but that's ok. They don't have to.

StarcraftManiac said: Does the 360 need Japan?! - To end up 1st place overall in sales?! Yes. Definitely. - To end up as a healthy system in the 20-35 million hardware sales?! No.

 

    Er dude MS is going to need well more than 35 million units sold by 2012 to call it a HEALTHY system. Last gen the xbox needed about (at the very least) 35 million to give the 360 some breathing room and it only managed 25 mill. Dude, the writing is on the wall; The 360 is going to have to sell roughly 45-50 million for MS to even consider taking a chance at an Xbox3. It'll also have to show more sales in the software dept. over last gen which stood at about 190 mill sold.

    If it's not obvious that the 360 comes in last this gen and may not even go on to an xbox 3 then I guess you're one of those that'll be losing the $$ they invested in a 360. Don't get me wrong, a console doesn't do badly cause it came in last. It can still be considered a success even though it was last in the race (a la the GC) but this is not the case for MS's xbox system. The way things are shaping up I doubt they'll be able to move more than 32-35 million units and that would be a serious problem especially for a console that came out the gate a full year ahead of the others.

If MS was smart, then 35 million would be enough to make Xbox 360 "healthy" - and that's exactly why they're being so stingy with the price-cuts. The hope is to stop losing money on hardware. If Microsoft can do that it can start making a profit in general.

I don't think MS can be #1 without Japan - but I don't think anyone will beat Nintendo this generation anyway. It can be well-off...even more than 35 million systems...without Japan, but that will take much stricter budgeting on Microsoft's part. Quit buying so many exclusives and maybe slash budgets on some new games. Make a profit on the hardware (or at least not a loss).

Analyze This: Does Microsoft Need Japan to Make the Xbox 360 a Hit?

Michael Pachter, Wedbush Morgan Securities:

"I think it will be exceedingly difficult for Microsoft to succeed in Japan, due to cultural bias against American/foreign companies that threaten established Japanese companies. Microsoft is taking on two Japanese companies, both of which have well-developed relationships with Japanese publishers, and both of which have superior first-party development capability (compared to Microsoft).

"To crack this market, they must improve both their first- and third-party offering. It's possible that they intend to offer Viva Pinata in Japan (first-party, below), and they have secured a handful of third-party titles that will likely do well there, but the lineup is far less impressive than either Sony's or Nintendo's. So, to answer [the] question, Japan is likely not very important, as it was never likely to become a major market for the 360.

"I don't think that this is [Microsoft's] fault. They have tried as hard as they can to succeed, but cultural bias has precluded success. I don't think that they will be able to fix things without an alliance with a Japanese company. [In] hindsight, it may have been smart to partner with Toshiba to put an HD-DVD drive in every 360, but that would have been exceedingly expensive, especially given Microsoft's low-price strategy.

"I don't think that American gamers are enamored [with] Japanese product because it comes from Japan; rather, I think Americans like good games, regardless of the country of origin. Microsoft doesn't need Japanese development to succeed in the U.S.; it needs good games, period.

"Courting Japanese developers is likely to increase the number of good games, but the same can be accomplished by courting U.S. and European developers. The problem for Microsoft is that it will be difficult to attract Japanese developers without establishing a meaningful installed base in Japan for its console, and as we discussed above, that is not likely to happen."

Source:http://gamasutra.com/features/20060719/wen_02.shtml

What Pachter is saying is, "Can't win, don't try." I agree with him in some sense, but at the same time, Microsoft is not going to take first place (world wide) with that attitude.

I also have to say that while Microsoft deserves some credit for putting a ton of money and effort into getting exclusive Japanese games and RPGs, at the end of the day it takes more than buying exclusives to really turn around your market position. Many people believed Nintendo's best strategy for this generation and last generation would be to buy up exclusive deals for games like GTA and Final Fantasy...but instead Nintendo came up with a strategy that has had a much larger impact, a strategy that turns the tables around completely and will force many third parties to support Nintendo for free.

Regardless of whether the 360 'needs' Japan, Microsoft won't get it. No time soon, anyhow.

North America is, by far, the most successful place for the 360, so we see things in the best possible light for the console. That said, something needs to be done. The 360 is far from generating a profit for a fiscal year, and further from generating any sort of reliable profit or recovering from the huge losses it has incurred. Sales have been following a general trend of slowing. If the PS3 surpasses the 360 late next year, or perhaps in 2009, then Microsoft will be looking at being in last place in the console market for the first time.

Can Microsoft win that depends on your definition of victory. Pachter is right it is all but impossible for Microsoft to succeed in Japan this generation. They do have a cultural bias to overcome, and the only cure for that is time. You have to be realistic about these things. You will not remove the stigma of racism, nationalism, or economic security in a few years. That is not giving up without trying you just have to move the barrier a little bit at a time.

The cultural bias can play both ways however. We might be looking at a divergent market. Up until this point the market has been seen as a unified whole. However judging by the difference in sales. The North American, and the European consumers might be drifting away from their japanese counterparts. Microsoft can play to this by gearing their software development to these audiences.

Nintendo might win the war, but it could end up being a hollow victory if Microsoft is sitting pretty with twenty million consoles in North America, and Ten million in Europe. That is what really interests me Microsoft is in a potential position to split the gaming market along market boundaries. Microsoft does not need to dominate all it has to do is break off chunks.

I don't see why they need Japan, you only need Japan for WW 1st position but to have a good business you only need around 35 M consoles, they can reach 70 M without Japan.

There will be no 'hollow' victory for Nintendo. They don't need to dominate the entire market to make a ton of money, yet they are about to pass Microsoft despite releasing their console a year later. A hollow victory for Nintendo would be the last generation, where the Gamecube was profitable for Nintendo but not as successful as they probably hoped.

Any major market 'matters', in terms of adding to your totall install base. The more owners, the more games can be sold to them. If Microsoft sold 100 million consoles in USA and 0 in Japan, Japanese devs would still develop for Xbox.

There is divergence between regions, as different regions favor certain types of games. But there are also the big sellers that appeal to all gamers. But gamers' preferences determine what developers make, not what Microsoft or any other company wants to do (breaking off chunks or whatever, which doesn't really make sense.) Microsoft can of course play to their strengths, but that is already reflected in the games that are avaiable and being developed for the XBox (or any console for that matter.)

I'm sure Bill Gates doesn't care about the billions of dollars made in Japan, that he is shut out of. What do you mean it doesn't matter?