[quote name='VGI-Shinobi']The Japanese are conservative, patriotic and close-minded. They boycott Xbox360 because they're afraid that the American console will fare better than their own Japanese consoles. Another thing, many Japanese game companies don't want to support Xbox360 because they afraid patriotic Japanese gamers won't buy their games. So yea, Microsoft should have learned its lessons to do business in Japan.
Look at Okami, the game is bombed in Japan just because the game is not familiar with any genre in Japan. I think the American gamers are more open-minded.[/QUOTE]
Its certainly a factor, but I think the main reason is that the 360 just has very little that the Japanese market is interested in. There are American products that do well over there against Japanese competition.
Its pretty much down to a vicious cycle of, developers don't want to make games for it because of its small installed base, and it has a small installed base because they can't get developers on board. Their marketing there is also terrible. Maybe they should've partnered with an established brand and let them do the marketing. There was a near bankrupt company there a while ago with name power that Microsoft, at this point, can't buy.
The marketing aspect is similar to what Sega went through before 1991, and after 1995. They didn't know the American market, didn't want to know the American market, and wondered why they sold so poorly here. The 4 years that Sega gave a competent American enough authority to do his job here, were their best years. Microsoft has no idea how to sell in the Japanese market, they don't know anything about Japanese sensibilities, and they have no one over there that is either competent enough, or with enough authority, to do their job.