By now it is no secret that the Xbox 360 got off to a slow start in Japan. Part of this may be explained by the delay of Dead or Alive 4, which would have been a nice launch title to have. But I don’t think anyone was expecting Earth moving sales in Japan even if DoA 4 had appeared on time. Sales will probably pick up once DoA 4 comes out along with a number of titles from a number of prominent Japanese developers that Microsoft went to great lengths to sign up.
Xbox 360 will almost certainly do better in Japan than the orginal Xbox did, but that may not actually be the point at all. Consider that the U.S. video game market is bigger than the Japanese market (which has actually been in decline the last few years), and what looks like a growing European market. Plenty of money can be made with successes in the more familiar U.S. and European markets alone. So why bother with Japan?
It’s all about the games. Some of the most innovative video games are still being developed in Japan. It is likely that some of the Japanese software under development for the 360 will also make its way to U.S. shores. So even if a Japanese 360 title strikes out in Japan because of the relatively low number of 360 consoles there, it may do quite well in the U.S. and Europe. And a more well rounded line up of games, relative to the original Xbox, will only help Xbox 360 sales everywhere.