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Analyze This: Does Microsoft Need Japan to Make the Xbox 360 a Hit?
"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."
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Features
Michael Pachter, 
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