this.

Back from watching VGA's. Good discussion here, but the real question is: I would say that the tactics MS has used to gain marketshare in Japan are inefficient at best (ineffective at worst). One could argue that continuing down that path might not be the best way.

They can throw all the money at it that they want, but until they understand the market, it is futile.

For Microsoft to have a better chance in Japan they are going to have to change their attitude. All along the only company they wanted was Square Enix. When they could not get Square interested in the Xbox they formed a deal with Level 5, that relationship soured. Next they had a deal with Myst Walker but once Square decided to support the Xbox 360. Myst Walker no longer mattered to Microsoft. They can not do this. They need as much support from Japanese developers as possible. They need Myst Walker, Namco-Bandi, Level 5, Atlus, and others.

Should they strongly pursue Japanese DEVELOPERS? Yes.

Should they strongly pursue Japanese CONSUMERS? No.

yeh they can, they can come in 2nd if they actually get some final fantasy's. they improved greatly from last gen, and Sony did a lot worse this gen then they did last gen. so yeh i think they should.

That is an important distinction to make.  I agree 100% with this.  I think if consumers are ever to be won, developers have to be the first step.  As I said, to break that market, they need to do it from the INSIDE out.  They are trying too hard to break from outside in.  I think they should halt that effort, and refocus on the games.

Always follow the money.

MS has to continue to focus on the US because the US remains the biggest non-diversified market in the world. Next, they need to make a bigger push in Europe because it is the 2nd largest market and they have room to grow there. Japan will probably be the last consideration not because its a bad market but because it is the smallest and most expensive to expand into. Devs will go where ever they can make the most money unless they are bought out by Sony or Nintendo.

They should not ignore Japanese style games because those games remain popular here in the US and in Europe but they need to 1st focus on keeping their customers and 2nd expanding into the biggest markets. Popularity in Japan will grow if they can maintain a lead in the US and if they can push Europe into their favor.

I can tell you right now that MS has complete control over the next generation of high end consoles unless a new player enters. They will once again be 1st out of the gate, they are still very profitable while Sony is hurting badly (financially). Next gen will be very interesting and will probably happen much sooner than most expect.

What Darth Tigris said.

I dont think Microsoft next console will be as successful as X360 (compared to ori Xbox). Sony probably will learn lesson that they should not let Microsof enter market first. PS4 could have same launch price as X720.

I'm sure MS will learn from both Sony and their mistakes as well next gen for all regions.